You con't level up with zero lives. You have to win a level and so you'd have one life minimum. In reality you are only awarded 4 lives to make you full to 5. and that's only if you were at one life. It's nice to get it but you never actually get 5 new lives.
The beach challenge is way too hard. I'm lucky to beat a level because I play at high levels and they are all super hard. I've only managed to get one crown so far. I don't expect to do well. The challenge is just too hard for high level players.
You would need to contact player support for that. .You can do that directly from your game. They may be able to help you if you can't recover based on the above suggestions. Good luck
Many players are reporting the same thing. It's a test feature and is not always available to everyone. Do some routine trouble shooting like making sure your game is up to date and restart your device. Sometimes this will help. Otherwise I hope it comes back for you soon.