I cannot finish the first level because when I get to the boathouse Bubba is not there.
Anyone know what is going on with this? Is there some bizzare criteria to fulfil or is it simply a bug, and if so, how do I fix it?

Sounds like a bug to me.

As for fixing it...well, it's gonna sound stupid, but did you try replaying the level? Nothing else comes to me off the top of my head, sorry. :P

Wow. That actually worked... :/

It was really strange, on my first play there was simply a shotgun-dude in there instead of bubba.

It was a trap! "Hi,ya Bubba! - uh oh!" :)

Well, I'm glad it worked. :)

It might be a thought to keep one save at the very end of each level, in case it happens again and a fresh reload is necessary.