Go to the level entitled Makin’ Waves and obtain the Clock item. About a quarter of the way through you should see a ramp and a guy in a rowboat. Go on the ramp and land on him to get two lives. However, you must kill your character to keep getting more lives. Since you get two at a time, you can slowly but surely build up your number of extra lives. Remember; get the Clock item, get the lives by jumping on the guy in the rowboat, kill your character, and repeat.