I found this recording of the complete "harmony smurf" tape on youtube:
It uses a single audio frequency, so it reminds morse code more than FSK when you hear it...
Interesting. Conversion to a digital signal may be fairly easy.
My first guess would be that the longer intervals are the beginning of a frame or the beginning of a message.
Somebody who's good at disassembly can probably spot the detection of similar patterns being looked for by the code.
Somebody with a Kid Vid, a digital storage Oscilloscope and a tape deck could lay up the digital signal out from the Kid Vid next to the audio track to see if there's a direct one-to-one correlation between "tone present" and a digital 1 or 0 from the Kid Vid digital output..
I wonder if the decoding could be as simple as amplifying and rectifying the signal with a filter capacitor to smooth the output. The output doesn't have to be ripple free and super clean. It just has to stay above and below the digital logic thresholds for the duration of a bit. Seems like a scheme like that would be appropriate to the time period.
An op-amp comparator set up with an appropriately low reference voltage could probably crank out a 90% duty cycle square wave from a sine wave. Again, a little filtering to keep the signal from dipping too low in the "off" times might work.
Hearing the "sound" of the KV digital output could tell how sophisticated the demodulation is.
Just throwing out some thoughts that anyone is free to run with if they so choose.
As ridiculous as it might be, I wouldn't put it past somebody around here to eventually do a homebrew Kid Vid compatible game.