This requires access to the e-Reader level "Spike Fortress". Near the third Ace Coin in the level is a pit of six Dry Bones. Jump on each of them in sequence while holding A for a boosted jump; by the time you knock down the last one the first few will be getting back up, allowing you to continue jumping in this way infinitely. If you manage to consistently jump on them until time runs out, you'll easily have farmed 150-200 lives.