Oooh ... that sounds awesome Mac!!! Hopefully you can share it one day.
As for the editor ... if it happened, I think that you would probably be given "parts" that you can alter and add. Much like how you can add features and units to the map in a RTS such as the editor included in StarCraft.
So to make it basic, you would probably be given a grid [that is the limitation of your area you can design]. Then say a selection of fixed parts [floor, rocks, fixed doors, background], movable parts [drills, opening doors, levers, meatsack, bombs], characters to put on the screen [Mudokons, Sligs, Slogs] and finally a portal. You would probably need to aim to create your own puzzle to lead the Mudokons to the portal.
I think it would have been challenging and fun to create your own levels. A pity it didn't happen. I could also see a lot of people trying to create impossible puzzles just so they could be evil and cause death to the Muds.
Abe Babe...