Great game nerdook, as always. The 1+20% upgrade and strategic rebuilding (waiting 'til a boss is at the top of a column then knocking the whole column down and rebuilding it so its in "ghost mode" for a second and immune from cheese) kinda kill the difficulty of survival mode. Maybe nullify all upgrades to make survival harder? Or you could institute a "rebuilding" penalty - maybe you only get half the soul value of a block back when you get rid of it?
Also - to increase strategy needed, maybe you could make it so that you can only build a certain number of the "good" blocks? Once you get Slow and Magma, I used almost exclusively those with an Eye or a Worm thrown in here or there.