I presume that the character is indeed in the level as you can see the blood splatters. To check that the character exists - can you collide with the character entity?
If you can confirm yourself the character entity actually exists then your probelm is confirmed as probably being one of the texture being incorrectly set up.
Given that the texture alpha is not making the entity 100% transparent then try using a different setting on the transparency factor in the setting in editor in the entities properties dialogue box - try a setting of 2 or another.
You may need to check the entities script file and perhaps even delete the entities .bin and .dbo files occasionally to get any changes to show up in test run.
Custom characters themselves can be somewhat problematical behaving in various erratic ways as FPSC is very particular, fussy and unkind to users when trying to use custom made characters.
In theory it is possible - in practice very difficult so it seems and much success is dependant upon the model file description and how it matches with FPSC file description understanding or requirement for characters.
