Luigi - Clear Adventure mode on at least normal with mario, Jigglypuff - Clear Adventure mode on any difficulty with any character, Cloud - Complete 100 man melee with any character. Crono - Clear 3-minute Melee. Naruto - Clear Adventure with the original 13 characters. Shadow - Clear Adventure Mode with Sonic, Tails, and Knuckles. Super Sonic clear Classic with Sonic on Very Hard Difficulty without getting Game Over. Zero - Clear Adventure Mode with Megaman without getting Game Over on at least NOrmal Difficulty. Young Link - Clear Classic with Link on any difficulty. Inuyasha - Clear Adventure Mode without losing any lives with any character. Mr. Game and Watch - Clear Target Test with every character but him. Mr. Incredible - Clear Classic mode with the original 13 characters. Mewtwo - clear Adventure with Pikachu and Jigglypuff. Lloyd - Clear Adventure with any character after having one hour of total play time. Blue - Clear Adventure Mode with Blade on at least Normal difficulty.
I have found that if you use the character in "survival mode" it will save your episode. So if you complete it again and play survival as elder...... you should have your episode saved!! because that happend to me with episode 3.