Glad it wasn't just me with the color hack. I don't discredit your work or anything, i'm actually very happy work is being done on it. Wish you luck. But it would be nice to have a notice in the hack page that mentions it's incomplete.
I tried several levels, and 1-1 was the only one with a mostly complete palette restoration from what i could tell. I also tested the following levels and (except when sharing tiles that had been restored from 1-1), they still had the overly brightened GBA palette-
1-2 (Watch Out Below)
1-3 (The Cave of Chomp Rock)
1-5 (Hop Hop Donut Lifts)
1-7 (Touch Fuzzy Get Dizzy)
2-1 (Visit Koopa And Para-Koopa)
3-1 (Welcome To Monkey World!)
3-2 (Jungle Rhythm...)
3-3 (Nep-Enut's Domain)
3-4 (Monkeys' Favorite Lake)
Those were the only levels I tested beyond the first, i get the feeling the other levels are unmodified as well. I could also tell that the the intro was not properly restored either, the one with all the Yoshi's around Mario trying to decide what to do with him (I forgot to check the prerendered intro).
The game's Gamefaqs page has several Gameshark snapshots for a 100% completion if you'd like to look at other levels (no guarantee it will work with your rom file but you could try it). There's an option in VBA to load the snapshot and if compatible with the rom, it will restart the game and create a new battery save for the completed file. You'll be able to tell if it works with your game by checking the file select screen and seeing if there's a cleared one.http://www.gamefaqs.com/gba/561566-yoshis-island-super-mario-advance-3/saves
There's also .sav files for the game on Zophar's Domain (which I hope isn't a banned site to mention or anything), don't know if they work however (or how much is completed).http://www.zophar.net/savestates/gba/super-mario-advance-3-yoshi-s-island.html