Beat the game on easy to unlock Cardboard Characters & Streets Level in arcade mode.

Unlock Rotating heads:

Get Silver on the Pane in the Neck challenge.
Get Gold on Adios Amigos.
Get Gold on Behead the Dead.
Get a silver or gold medal on the following levels to unlock slilly hats.

Level - Hat:

2280 Escape from Neotokyo - Big Ears
1853 Silent But Deadly - Viking
2019 Trouble At The Docks - Pirate

Complete the level on medium difficulty to unlock the bonus character.

Level - Character:

Return to Planet X - Ozor Mox
Wild West - The Colonel
NeoTokyo - Sadako
Aztec Ruins - Stone Golem
Atom Smasher - Khallos
Space Station- Reaper Splitter
Siberia- Hybrid Mutant
Chicago- Big Tony
Notre Dame- Jacque de la Morte
Robot Factory - Machinist

When you restore the power in the building, go down to the "Digging Site". When you get there, you will see a case with something in it. Make sure you have plenty of Timed Mines. Walk towards it and throw four or five Timed Mines at it then run away. When it blows up, the woman on the speaker will start talking. People with very good guns (Flame Thrower, Shotgun, Machine Guns, etc.) will appear. You will also have a new objective to not let any mutants survive.