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Level 3 - NJILYTO
The answer to this puzzle is:
Words: LINTY, JOLTY, NOILY, LOTI, LINO, LINY, JILT, INTO, INLY, OILY, TINY, TONY, LOIN, TIL, OIL, TON, YIN, LIT, TOY, YON, JOT, NIL, LIN, NIT
Bonus words:
LINTY, JOLTY, NOILY, LOTI, LINO, LINY, JILT, INTO, INLY, OILY, TINY, TONY, LOIN, TIL, OIL, TON, YIN, LIT, TOY, YON, JOT, NIL, LIN, NIT