Overlapping Obstacle Transparency Radius

https://www.dropbox.com/s/busrtopxo0gh76s/transparentradius.png

In the above, I'm trying to use destination out blend mode on the trees and other obstacles that overlap above the player. However, because the player and other characters need to be on the same layer as the trees and whatever else, the object that uses destination out to make a semi-transparent radius around the player effects all the characters as well.

I tried various methods to get this to work and the solution is eluding me. The closest I gotten it to work is making all actors appear over the destination out object but then they appear over the trees and such when they should be appearing behind them.

I only have one question:

Why does the player need to be on the same layer?

Unfortunately C2 doesn't have object-specific masking ATM, so the only solution to put the player and the trees on different layers. Of course, as you have stated, this leads to other problems so it probably isn't the best solution.

I'm stumped. There's probably a way to do it, but nothing comes to mind.

They need to be on the same layer so trees for example will appear over enemies and such if the enemy is behind them and behind the enemies if the enemy is in front of it.

Is there a way to draw a line around the characters instead if they're covered by an obstacle, but on a layer above the obstacles?

I solved the problem.

I made a tutorial on how to pull it off here.