If I am on level 4 and choose to invite someone to my game who is only at level 1 and we choose to start at level 1 replay for me and new for him, will he be able to pick up all the dragon tears if I already got them? I'd like to keep my advanced character to help him but I don't want him to miss out on getting the dragon tears.?

i could be wrong, but i don't think the game saves independent versions of characters.

For example, if he is player number 1, the game is going to load his versions of both characters, and then you will take over one of them. But it is not possible to 'merge' two characters from two different games in the same play-through.

Allowing such would cause a conflict in the crystals, like you described. Which is probably why the designers didn't allow it. i wished they would have created a version that did, tho. With a lot more weapons and items.

thanks for the reply