So, not sure how to achieve this. I have a prop of a guitar that needs to interact with my character, ie the character must hold and strum the guitar, so the character's hands must be on top of the guitar png, and the guitar must be on top of the character's shirt and pants. I seem to be able to chnage the layer order of the character only and not the prop in relation to the actor's hands, body etc.

What version are you using?  You'd have to add the prop to the actual character, in the Character Composer and then use the layer manager to get it layered correctly.

Crazytalk animator 3 (pipeline), using the G2+ characters... and a custom made prop (PNG file).