Walk to the right of level 1 to find the rubber ball located next to the chest of drawers with the bucket of army men. Jump on the ball and press Right to land on the bottom drawer. Hold Down while on the bottom drawer until Woody's health star begins to spin.
Level skip:
Enable the "Invincibility" code. Crouch on the bucket of soldiers in Level 1 for approximately seven seconds. Pause game play and press Select to skip any level.