Incredibly well done, sirs. This is definitively the best episode yet, well worth the wait. I'm not one to squander image macros, most at all on these forums, but take this as a token of my appreciation.
The entire thing was amazing. The Ice Climbers were just excellent, their twisted faces, the bloodstained mallets, and the way they bumped into Link on the way out. Falcon's speech, Mario and Link's combat, and of course Kirby's soliloquy... every single bit was brilliant.
As for the identity of the killer... Kirby mentioned 'leaving their insides behind', and then went straight for wearing Daisy's head as a hat. I think it's pretty obvious the killer is somehow stealing the skins of those he murders, to wear them as a disguise perhaps. What this means in the SSBM canon - especially since most characters have already shown up - I cannot say.