Hey! It seems that when you load a Flash 8 (or AVM1) swf into
a Flex application (or any AVM2 swf), it is unable to utilize its
_levels correctly. To circumvent this issue, try creating an empty
movieclip called level2, and that should work.
Let me know if this work, because another issue can arise if
you try to load multiple swfs on that same movieclip.