My first game project with a programmer was Undead for Commodore 64. We spent two years on developing playable demo, but could not get further than that. Sprite animations were created with joystick. For backgrounds, my friend was able to hack C64 art studio so that Amiga's mouse could be used. Sprites have 3 colors + transparency color. Backgrounds are bitmaps, not ASCII, meaning that they can utilize the full Commodore 64 palette!
Video of the playable demo.