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Is there a reason that selecting New Game starts us in Chapter 5 with an invisible, level 1 protagonist before crashing midway through combat?

I am literally having the same issue and I am quite upset to see that there was no response to this :(

I found solution to this. You have to start new game in the demo, save on the world map and then paste save from demo to full game. Saves are stored in Crystal Tales Tactics v1.0.2\www\save. Don't paste saves that has been made inside camp, they won't work in full game.