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I've update the wiki with this info now 
Also thanks to icup we have a screenshot of it being unlocked:
And I made a new video for the level:
The time is pretty tight on this one! A tips is to not charge your fist longer than necessary for those rising platforms.
Edit: It's also very confusing how the N-Gage version handles this
"Ly's Punch Challenge 1" on N-Gage is this level, but modified to not have the skull platform and no timer. It replaces Magma Mayhem. They then renamed the original "Ly's Punch Challenge 1" to "Ly's Punch Challenge 2", "Ly's Punch Challenge 2" to "Ly's Punch Challenge 3" and "Ly's Punch Challenge 3" to "Ly's Punch Challenge 4". But I have no idea if this level, now Ly's Punch Challenge 4, is actually accessible in the N-Gage version. It's in the game data, but the level curtain doesn't appear in the overworld. Either there's some other condition to unlock it here or it's unused.
Also thanks to icup we have a screenshot of it being unlocked:
And I made a new video for the level:
The time is pretty tight on this one! A tips is to not charge your fist longer than necessary for those rising platforms.
Edit: It's also very confusing how the N-Gage version handles this