You still have the player on the lowest layer. Right click on sprite and move it to the layer named "layer 0" in your case. Then right click on the player again and set z order "move to top". Done
I can't upload the capX again because I have a higher C2 version than you. But do as described above and you'll be fine. Just remember that if you want something to be in front of something else the sprite you want in front always have to be on a layer above the other objects layer. The name of the layers doesn't matter. The order of the layer from top down makes the difference.
Here is the the fixed capX if you have version 206. I changed the names of the layers and put the sprites on the correct layers.
https://dl.dropboxusercontent.com/u/100 ... ggame.capx