I used a plane to start to make a character. When I started to convert it into 3d the I can move any of the vertices on the global x or z directions, but I cannot move any of the vertices on the global y axis, even when the Transformation orientation is switched to global.
A copy of the blend file can be found at:
https://www.mediafire.com/?2b7jks1q6dqy1bu
and here is a screenshot illustrating the issue.