Castle Crashers character unlock problem

I recently beat the game on xbox live with a guest. I played as the red knight and I beat the game and I did not get the 2nd form, skeleton. I have played all the levels but I have not beaten all of the arenas. Would playing with a guest affect this? Also, I did not get the final kiss from the princess. Any idea why I did not get the 2nd character? I'm really excited to play as the 2nd form.