I have a question regarding the rule "No covers allowed, only original works." Are derivatives of works that significantly change the melodies, chords, rhythms, and form of an original work, while maintaining at least some resemblance to the original considered original or not original?

Since that is horribly general, here is an example
Original: http://youtu.be/ZZoJLMuq_cQ
Derivative: http://nazr.in/DAD

I've been assuming that something like this isn't considered original, but I figured I'd check.