Can you verify that the character prefab was converted with the PUN Object Setup?
If that setup is correct, can you log the root transform Y on both the owning client and the remote client. The important value is the root Transform position being sent by PunCharacterTransformMonitor, not the collider center. If the owner is sending Y = 0.3, then something on the owning character is lowering the root before PUN sends it. If the owner sends Y = 0.5 but the remote ends at Y = 0.3, then another component on the remote object is overwriting the PUN transform.