In order to unlock The Land of The Livid Dead, you must first collect the 10 skull teeth that are part of the treasure chest chases. After unlocking them all bring them to the Snoring tree and when you get there immediately go left and give the teeth to the bald headed guy. Once there you must make your way through the level to reach the boss. Be warned, this level is the most difficult and is extremely frustrating. You will, however, learn through trial and error.
Here is a linked video to help you with the deaths edited out, all credit of this goes to the TheFlyingToaster.