Imo, Raph is Nightmare. I think too many people assume that every character on the roster have to have been active at the exact same time. Remember, the story was supposed to be 4 times bigger than it ended up being. It was brought up earlier I believe will revive the point.
We know of several facts:
-Raphael's family was arrested after Dumas became active
-Graf Dumas is far more political and manipulative of events then our 2nd incarntion of Nightmare was in SCIII and IV
-Nightmare was reborn by Tira after dragging a corpse from under Ostreinsberg Castle
-At some point, Raphael wakes up in a prison cell
-At some point, Nightmare is somehow killed by ZWEI, possibly implied "Ring Out" via story pics
-At some point, Raphael and the 2nd Nightmare both died and mysteriously revived
We also know that Raph and Nightmare coincidentally share several traits both in and out of game:
-Raph and the reborn Nightmare are both 5'8"
-Raph and Nightmare are voiced by the same seiyuu
-Raph and Nightmare both have blonde hair in their artwork and the same blond hairstyle in CAS
-Raph and Nightmare share the exact same face models.
-Raph and Nightmare both died and somehow were resurrected.
-Raph and Nightmare both share the same bat theme in SCV
Ruling out none of these things and assuming Nightmare is in fact Raphael in SCV, this is my theory:
At some point after Nightmare is defeated and/or killed by ZWEI, he is apprehended and imprisoned (well "Graf Dumas" is at least). Most likely he was supposed to be judged for crimes of genocide and murder of innocents and being recognized as a Malfested by Siegfried, Hilde, and Patroklos.
If this is true, I assume Raph's bio begins at this point. Raphael, stripped of his memories as Nightmare, awakens in his cell with only the memory of his life beforehand as if he had just been asleep for a while.
The details of how Raphael was dead and is now alive cannot be explained because there is a huge inconsistency with Malfestation and the effects of Soul Edge's possession throughout the series, and specifics cannot be held when developers often shoehorn reasons for things happening the way they happen. However, I believe this is the sequence and general summary of events that Project Soul logically would take and have us believe.
In short: Nightmare died, Raphael revives in Dumas's cell, Raphael breaks out and becomes active searching for Amy.
Should this be true, and Viola is Amy (a separate argument I will make if needed), then it is logical that the portion of Viola's bio of her "regaining her memory" was also part of the cut story content and would have occurred between her last appearance and story mode and ZWEI's attendance in the battle against Nightmare's army.
In that case, the exchange they have in versus mode (Viola's hurt reluctance to fight ZWEI but callous taunt of being too curious, and ZWEI's indifference at fighting her and then slightly hurt farewell) might be related to the fact that ZWEI may have learned that Viola is a malfested like Nightmare/Dumas and his forces, likely via Viola's sudden resurgence of memory which she may have revealed to him. ZWEI feels obligated to kill Viola because she is malfested (as he shows no issue against Patty's crusade against malfested but the fact he is manipulated by Dumas and killing people who he cannot prove are malfested).
Whether Viola regains her memories because the one who malfested her (Raphael) revives and becomes active again is impossible to determine but I believe what I have already inferred and theorized is quite possible.
However it is only theory and cannot be confirmed, no matter how much evidence I bring forth.
Therefore, Raphael is Nightmare and Viola is Amy imo but Raphael and Nightmare were not both active and alive at the same time but the Raphael in SCV is one who is alive after the Nightmare of SCV is dead.
--Forgon