I found myself trying to destroy objects and shrubs with the hammer and sword everywhere, and although it keeps me entertained, I was hoping to find some items or gold after trimming the yard. I found the archers in prison entertaining, although it begs the question why they were captured with their bows. I very much liked the underwater well, although the water under water is still strange, even after your explanation in-game. The candles were also, eh, quite a unique sight there.
Gameplay is just fine. It takes little effort to get used to, and I am glad there aren't any tutorials. It's nice to find stuff out yourself. I think you get items very quickly though, especially the spell early on, making the sword obsolete in terms of range and attack power. The shield is a very handy addition, and works perfectly. As I said before, trying to destroy blocks and shrubs is neat.
Enemies are easy, so far. The fish and blob boss have easy patterns they fall into, and standing still, blocking, then using the spell makes it a breeze. Perhaps you should introduce the spell later on, making the fights less ranged, and more challenging.
Story... well, it's about gems and world domination, so not the strongest point. But that doesn't matter, because you don't spend too much time on this - you let the player jump right into the action again.
Visually the game looks nice - especially the outside. Some houses are quite empty and large, with little of interest there. The underwater effect works well.
Music is nice, and works well for the environments. - I take it you use .wav? I can't imagine the file size to be that huge with MP3. Also, the protagonist's "hmm" sound made me laugh :) .
It's a neat start of something with a lot of potential. Although the pace is quite fast, and you gain usable items sooner than you can use them, the game didn't bore me, or drag story wise. Truthfully, it was a shame when the demo ended, for after the boss I felt ready to keep kicking ass :)