Hello,
When launching Spiral Knight from Steam, the game starts and the login window appears, asking for name and password. There is nothing to tick for Steam connection. When I enter my account name (Sexyven) and my password, game goes straight to the new character creation step.
As this character creation step doesn't happen when I try to login with a different username, I hope my character didn't vanish.
Also, my original name was Sexven. Got changed by admin after a troll/whiteknight kid complained about it. Maybe that could help you resolve the problem. While you are at it, I asked for my name to be changed back a while ago, got an answer like "we'll talk about it between us" but then no news. I would really like it to be changed now, because "Sexyven" doesn't sound funny at all, it actually sounds ridiculous.
Thanks.
It's steam being dumb. You have to restart it until it decides to work.
On a personal note, why was your old name considered bad, but not your current one? It was an odd decision indeed.