There are a few ways, and there are problems with each. I kinda tried this but put it on the shelf (see link) but I might pick it up later. For now I'll share my view on how to do this, which is just my uneducated opinion
Link to similar level creation:
http://forum.thegamecreators.com/?m=forum_view&t=201869&b=48
So, one issue is having that many sprites on a screen and accessing each one in a "for loop" each frame of the game, I don't know what resoluton you were thinking of but the smallest sprite I did with the above example was 4x4 pixels, under that even my pc slowed down not to mention a phone.
Methods using box2d
One way is to make each sprite in your level a physical static sprite, quite unimaginable with pixel sized tiles.
Another way is to each frame (or when a change is done, i.e an explosion) loop through your existing level sprites and check which one are "surface" tiles and setting those to static physical sprites.
Not using box2d well then you still have the issue of having a great big loop to check the status of all your tiles.
Once the memblock commands are in (are they? haven't checked in a few weeks) you can have your map drawn on a bitmap and check each pixel for maybe color to decide if they are ground or air.
Food for thought perhaps. I'd love to see some ideas to solve the issues I myself found when doing this type of level.
My hovercraft is full of eels
