Good idea, except the only level weapon I know of is the "spider staff" on the Beetle Lair level. These weapons supposedly have their own movesets and combos, so I don't see why not. Although they might be somewhat unimaginative. There are only so many things you can do with a staff.

it's very possible, it'd be awesome if they do put in level specific weapon fatalities. I really like the idea.

Peace Out

very possible & very kool
We haven't been told of weapon fatalz yet so this kould do.

An interesting twist on the weapon in the "yin-yang" level would be that it could have the power to both hurt and heal depending on the status of the backround. Imagine if you whacked your opponent and took some life away, just to have the backround change and next time you hit him, it heals him.

That sounds cool.
What if they had some techno level with a laser canon? Or maybe another laser weapon, like a blade or wip. Imagine being able to take the laser wip and cut through your opponent into chunks.

I think a whip is definately a weapon that should be utilized this time around. Not for the stage weapon, but for someone's actual fighting style.