There IS a level editor for Lemmings Paintball stored inside of the game itself, but nobody knows how to activate it. It seems to be activated using command lines, but their use are unknown and may cause the game to crash.
I started a little bit over the weekend. From what I can tell so far, you can pass in "/EDIT@" on the Command Prompt to make the game try to load a level stored in a file. For example:
lemball.exe /EDIT@nofile.xyz
The game will launch looking normal, but when you click on the 1-player icon on the main screen, instead of loading Fun 1 it will try to load a level from file nofile.xyz in the current directory. Of course that file doesn't exist and you end up with a rather funny error message which I'll leave it to discover for yourself.
If you do have a bogus file named nofile.xyz placed in the correct location, then as expected the game will crash trying to load that bogus level file, when you click on the 1-player icon on the main screen.
This of course doesn't quite prove that there is a working editor in the game, but it clearly points to the next step: figure out how levels are stored in PBAIMOG.VSR. That should then hopefully allow for individual levels to be extracted from the VSR into standalone files, which then might be loadable and editable using the command line switch above.
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sidenote: the full list of command line options I can see in the EXE are as follows:
/NOMUSIC
/NOEFFECTS
/SNDDEBUG
/STATDEBUG
/MEMDEBUG
/NOANIM
/NOZOOM
/320
/TESTALLLEVELS
/?
/TESTSTARTSKILL@
/TESTSTARTLEVEL@
/EDIT@
/PLAY@
/GRAPHICS
I've only tested very few of them so try them at your own risk. Some might not do anything observable. For /TESTALLLEVELS it appears the game will proceed automatically to load each and every level on its own, one by one. It is clearly a test mode and doesn't appear to allow you to intervene short of using Task Manager to kill the program.