How should I show the player and some area around them when behind an object obstructing view?

Alt title was way more obtuse, if you can believe it: Localized transparency based on mask/map information and rendering priority?

Basically, I want the player to always be shown even when behind an object, and even better if I can show some of the area around them. It had me thinking of how I could change the rendering priorities of objects, to force the player to always be rendered no matter what, but I don't know how to do the same to the area around them.
I'm hoping to have the effect be a circle with a faded edge around the player, but uncertain how to achieve that.

I was wanting to have some texture or map information be place on the player (or camera) with the faded circle around them and use it as a mask to somehow blend rendering priorities on a per pixel basis between foreground object and background object - or what's hit by a raycast between camera and player. I'm going to make an image of what I mean soon, maybe tomorrow, but hoped to maybe get a response in the morning, so made this now. I hope it's not completely incoherent.

Blue is the player, red is the background, yellow is the foreground object. When The player goes behind the yellow object, I want the object to become transparent around the player - but not the entire object. Represented by the bottom right image.

 

have a look at the vid on http://forum.unity3d.com/threads/pick-up-objects-highlight-object.382131/ is that the kind of thing you're after? if so you're talking shader coding

 

It's not exactly what I need, but it's hard for me to say that it's completely unrelated when I'm trying to find out what I have available to me as likely avenues to achieve this. Updated the original post with an image for a better explanation, if you could have a look.

 

anyone got any idea of how this is done I need to do it aswell for my top down game. I cant figure out how to an area of influence around the player to achieve the transparent effect when they are near to walls