Topic: The Mystery of Candy Mountain: Sort of Solved...
I have a theory that Candy Mountain is the unreleased and unfinished Christmas level. Just think about it.
The Xmas level has candy canes, hence the "Candy" in the name.
And usually, Xmas levels have some snow-related theme, like a mountain, hence the "Mountain". Then again, we don't know where the Xmas level was going to be, so it's a sort of mystery.
Another thing that goes against this theory is the fact that Candy Mountain is the third zone of Yasuhara Hirokazu's flowchart of X-Treme, and usually Christmas levels are some sort of bonus zone that isn't related to any of the story.
Or maybe it was going to be like Sweet Mountain from Sonic Colours...
Also, what the heck were those bearded creatures? They're clearly not Mips, so are they some sort of new alien?
Was it referencing "An X-Tremely Sonic Christmas"?
Oh wait, I'm sorry, it's actually called "Sonic Christmas Blast". How could I be so blind?