http://forums.runicgames.com/viewtopic.php?f=30&t=35698

1. Back up your save folder
2. Make sure STEAM cloud synch is disabled

3.

CHARACTER RECOVERY INSTRUCTIONS!
Unread postby travisbaldree » Sun Sep 23, 2012 7:08 am
If you get in a state where your character is corrupted or not loading at the main menu, we store backups of these!
Here are the instructions for RESTORING your backed-up character in the event that it is somehow destroyed or munged up-


For Steam versions go to -

Documents/My Games/Runic Games/Torchlight 2/Save/76561197971213642

For Non-Steam versions go to -
Documents/My Games/Runic Games/Torchlight 2/Save/

See your player file there? The file should begin with their name, and a long sequence of characters called a GUID.

It should look something like this -
SANTA_{29D2CA6E-309D-4A89-8026-005186CABBB9}.SVB

There should ALSO be a restore file - it should look like this -

santa_{29d2ca6e-309d-4a89-8026-005186cabbb9}.restore

Before you do ANYTHING ELSE!

COPY EVERYTHING OUT OF THIS FOLDER AND SAVE IT SOMEWHERE ELSE! We don't want any accidents!

Now, take the 'broken' SVB file out of the save folder and stick it somewhere else.

Rename the extension on the .restore file so that it is SVB (just like the save file was before)

Run the game again, and your character should be safe and sound.

I registered only to say thank you. You saved my life. :D

glad it worked out for you and Thanks!