Well...I just finished answering this question at AZC...guess I'll put a copy of my post over here for those who wouldn't otherwise see it.
I'd like to thank C-Dawg for figuring out how the bug works...he's explained it several times over here...I don't get why the answer's not more generally known.
Before we get started, remember this "problem", which actually gives the quest designer more flexibility if you understand it fully, only occurs on dungeon Dmaps. Cave and overworld Dmaps use the screen you specify as the continue point.
The reason for the problem is that ZC allows you to have multiple entry points for a dungeon...and you'll always continue wherever you entered the dungeon...so long as you used an entrance/exit warp to get in, and the dungeon only has one Dmap. It was an extra feature, which only started causing problems when multi-floor and extra-large, multi-Dmap dungeons started appearing.
First post:
As far as continue problems go, all you have to do is remember that ZC puts the absolute (not Dmap relative) screen location in a box when you use an entrance/exit warp. Then, if you die on a dungeon Dmap, it takes you to that location on whatever map you died on, reguardless of what map the level starts on, but it still thinks you're on the Dmap that you died on.
So, if you die on a Dmap other than the one on which you entered a level, ZC gets confused. The solution is to:
1) Always put a stripe of pitwarps (which look like floor tiles) across your entrance rooms, so that Link has to cross it to enter the level. Set the tilewarp to send you to that same screen, on the appropriate Dmap. That will get you back on the right Dmap, in the right room, if you die on a different Dmap, but on the same map.
2) If your level spans more than one map, note the absloute location of all the entrances, and copy those rooms to the other maps you use. Make sure the tile-warp is likewise set up to take you to the original version of that room (as long as the tilewarp copies together with the room, you should be fine, so just make sure to use paste all).
Second post:
If you're getting the 0,0 problem, it's because you aren't using an "entrance/exit" warp to enter the level. Only "entrance/exit" warps put the map location in a lockbox...so if you don't use any, 0,0 is what's in that lock-box by default. Whenever you send Link into a dungeon Dmap, you should use an entrance/exit warp.
Advanced:
On the other hand, you could never use an entrance/exit warp...which would mean Link would always start out at 0,0 after he died on a dungeon Dmap. It could serve several purposes...first of all, you could easily make sure you have all the extra "entrance" rooms that you need...since every dungeon map would have a fake entrance at 0,0. You could also use it for special effects...for example, you could set up room 0,0 to have Death say to Link, "I'll let you off this time...but don't try my patience." and then warp Link back to whereever you want him to continue from.
One word of warning though: if you decide to use the 0,0 trick, you can't use any entrance/exit warps. If you use even one, it will put the location of that warp into the entrance/exit lockbox, and all of your levels will have continue problems after Link goes throught it. (Unless, of course, the entrance/exit warp takes you to the absolute map screen 0,0...in which case it wouldn't change the contents of the lock-box, since it's already set to 0,0.)
You'll also limit yourself to having only one entrance to each dungeon by doing that, since Link will always continue in the same place, not always where he entered. But then again, most people limit their quest that way anyways.