I've been able to squeeze a bit more out of the standard RAM, so I'm trying to expand the depth of gameplay here a bit. There are a couple of different directions this project could go in, so I'm a little curious to hear some feedback on some of these ideas from people who are playing the game. Some of these are already implemented, but I won't post the changes until they are fully debugged.
1. Foot Soldiers

These are mostly implemented right now, and will be a part of the next build I post. This is an alternate enemy ground unit; Essentially the weaker, more prevalent sibling of the Knight. They travel more slowly then the Knight, and are easier to hit. Each successful hit diminishes their rank by one (25 pts) until there are no soldiers left. A dead center hit, however, wipes out the entire unit with a single strike for bonus points (150pts) and a temporary speed boost in the direction you are moving.
Over time, I had the thought that an alternate, stronger Soldier variant might begin to appear who can lay siege to castles and eventually overtake them. Unlike a destroyed castle, Enemy Castles will erect walls that impede your movement around the kingdom and release a powerful Wizard who must be destroyed to free the castle.
2. Castle Repair and Upgrade
This is partially implemented right now. At the start of play, each castle has 18 hit points which diminish to zero as they are hit with dragonfire. In between waves, each castle automatically recieves 4 hit points of repair (during which a little contextual tune plays letting you know how the kingdom is doing overall.) This counts for destroyed castles as well, which are ressurected and restored to four hit points. If you protect your castles well in a round, even destroyed castles can eventually be restored to abundant health.
Here's the part that isn't implemented, but that I'm partial towards experimenting with. Although Castles begin at 18 health, they will continue to add health between rounds, even if their total hit points exceed 18. However, when a Castle reaches a ceiling of 30 hit points, it is automatically upgraded to one of four possible "Super" Castle types:
The Monastery

This castle type functions as a sort of "gas station" for the Knight's health bar, gradually healing his wounds while the sprite is touching it.
The Ballista

This castle attempts to wound/kill any nearby dragons with a giant crossbow.
The Fort

This castle has special fortifications that shield your knight from incoming dragonfire when positioned near it.
The Wizard's Tower

This castle will teleport your knight to within a screen length of a dragon when the sprite is touching it and the player presses the fire button.
EDT: Teleport the knight to any position in the kingdon. Touch the knight to the castle, press and hold the fire button, then move left or right to rapidly scroll the screen in either direction. Release the fire button to teleport to that position.
Like normal castles, these will gain health between levels, but if they drop below the 30 hit point ceiling, they will revert to standard castle forms. This sort of system might add a layer of strategic depth to the game, particularly in the later levels when you will have to make snap decisions about which castle to defend. I am still unsure if I can steer multiple dragons without the aid of the SARA chip, but I am fairly confident I could implement something like this within the standard RAM limit.