Here’s my personal tier list. Mainly influenced by playing matches myself, watching the Japanese, looking at other lists and talking with other players.
EDIT: (REVISED)
God Tier:
Kouryu (Banned obviously)
Top Tier:
Power Zantetsu
Speed Moriya (With 'port glitch)
Power Lee
Power Mukuro
Upper Mid Tier:
Power Amano
Speed Akari
Power Kagami
Speed Shigen/Speed Washizuka
Power Kaede
Mid Tier:
Speed Hibiki
Power/Speed Kojiroh
Power Setsuna
Power Juzoh
Power Okina
Low Tier:
Power Unawakened Kaede
Speed Yuki
I’d say that outside of the top 4, the game is actually pretty well balanced. Most of the mid-tier has a fine chance against all of the upper mid tier.
Fully inclusive list
Top Tier:
Power Zantetsu
Speed Zantetsu
Speed Moriya (With 'port glitch)
Power Lee
Speed Lee
Power Mukuro
Upper Mid Tier:
Power Amano
Speed Akari
Power Kagami
Speed Amano
Speed Kagami
Power Akari
Power Moriya (With 'port glitch)
Speed Mukuro
Speed Shigen/Speed Washizuka
Power Kaede
Power Washizuka
Power Shigen
Mid Tier:
Speed Hibiki
Power Kojiroh/Speed Kojiroh
Power Hibiki
Power Setsuna
Speed Setsuna
Power Juzoh
Speed Kaede
Power Okina
Speed Juzoh
Speed Okina
Low Tier:
Power Unawakened Kaede
Speed Unawakened Kaede
Speed Yuki
Power Yuki
Lots of Japanese LB2 tourney matches here:
http://youtube.com/profile_videos?user=Kyokuji
Link to my character guides/advanced system thread