This game is the most disappointing of the competition for me. Please don't be offended by my opinion, but I find the game far too tedious and not very fun at all. You both have worked extremely hard on this, and you deserve kudos for that.

Allow me to quote you some advice that Alexey Pajitnov, the author of Tetris, gives out in the book Game Design Secrets of the Sages:
Nothing Is Too Simple
Pajitnov says nothing is too simple for players and mentions this first because "when you get too close to your work and you're involved with it for so long, things tend to look simple to you." With the puzzle games Pajitnov has worked on in the past, everything looked to be trivial after a while, but he later realized someone who hasn't seen the game yet would likely find it challenging.

Don't Neglect The Hard Puzzles, Either
"No matter how difficult the task, there will be the player who figures it out," says Pajitnov. He admits this is contradictory to the first point, but they're both correct. "Don't neglect hard puzzles because you don't think someone will figure them out; there will always be a smarter gamer than you."
What I found in Blocked is that the difficulty became rediculous after the first level. Allow me to correct myself: From the first boss onward.

The first boss took many shots to the gears and "axel" but showed no sign of damage. I died 3 times before cutting him off at the waist, and by then he was INSIDE my base. Yeah, on the opposite side blasting all my treasures out to sea. I figured out that I could throw his bottom half and knock the remainder into the sea, but it took awhile. This is 45 minutes of playtime, 2nd try, and the boss was still firing. I finally finish the level. Then the ice one came along...

Your statement that the gears in that level are inaccurate is inaccurate, they're slow to aim (IE they don't predict fire), but they are very accurate over range. That said, they also spawn too quickly. (Alot of my issues could be solved by a difficulty setting.) I found in the first and second try, not lives, that I had to stay mobile. I couldn't even grab a few of the stones (hopping from ice floe to floe) without fireballs wizzing past. The sharks are perfect though and provide a steady and even difficulty, I even blinked twice when one somehow jumped out of water and up onto land... The Hydra is just too difficult. I made it to the island, with the spawn trigger, with full lives and lost them all trying to figure out how to kill the blasted thing. I blew off a total of 6 heads and my slowly regenerating energy was just a joke. I never damaged it past that. I tried creating ice bricks under it's belly, dunno how I got under there without dying, and the engine seemingly absorbed them but without any effect. I got rid of about 3 bricks in the enemy ice castle one time, but lost 4 lives in the process. The only gears actually shooting are the close ones, who are hard to dodge. All in all I gave up in 3 tries and 2.5 hours of irritation.

My first suggestion is the addition of a difficulty system with at least 2 levels. Second, I would put a slight rotation snap to the blocks, so every 45 or 90 degrees they would have a tendency to snap to. Also you might want to look into changing the energy system to a float value, then incrementing it steadily instead of in chunks every 2-3 seconds.

Again, I don't want to diminish your success at reaching this point because it's taken a mountain of work. I just wish that it were a bit better balanced for a casual puzzle gamer. The physics system and the lighting are quite good, and I was very impressed with the "budger" and bumping blocks together. Ice in the water, as well as wood, was also very cool. You've really put alot of work into the physics, as well as the graphics.

If you'd like a bit more specific critique on what you could improve, let me know. I hope I haven't come across as flaming, it sure isn't intended as such, and I really do wish you teh best of luck.