http://www.youtube.com/watch?v=X52EKFIeKhY
I have built a 3D world in Corona using the 2.5D image transforms, snapshots and a lot of complex maths!
It loads a tile map from Tiled and uses the 2D Tiled map to generate a camera projecting a 3D world on to a screen, which is a snapshot.
The engine also generates the floor at different levels. In the demo the track is separate to the tiled floor and hovers above it.
Where the polygons stop drawing, near the top of the screen. That is the horizon which can be altered but in a real game the sky would draw down to that point making it look seamless.
This nearly broke me!