I also had exactly the same problem with my first character. When i killed the skeleton king and upgraded my account i needed to start all over again (luckily i did buy a box edition)
However right after i noticed that i needed to start with quest 1 a friend of mine wanted to play with me, > he then made a new game (he was party leader) and then all the quests i had done were back,.. so hope this helps..
Probably because you practiclly reset your game..
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