Little big planet 2 local multiplayer not working, am i missing something?

I rented little big planet 2 and I was able to play local multiplayer just fine, but recently people who want to join in aren't able to play. They are able to log in as normal and even the sackboy loads in the pod. But once we start a level only one sackboy is playable and the other doesn't pop out until the end of a level. I thought it was just happening with single player levels but this also happens with story mode levels. When we play multiplayer online, other people can join in but the local player cannot. Am I missing something?