[Vectors] Moving towards a specific point on the XY plane by only rotating about object's local Y axis and translating along its Z axis

Hello all,

I've got a bit of a conundrum and I'm hoping someone might be able to point me in the right direction involving vector math. I recently implemented a character movement solution found here:

http://answers.unity3d.com/questions/155907/basic-movement-walking-on-walls.html

Before I go any further the reason I am posting this as an entirely new question rather than as a comment on that thread is that I feel like my question is different enough to justify its own topic.

This movement solution rotates the character about its local Y axis and then moves/translates it forwards and backwards along its Z axis all the while keeping the characters "gravity" pointed towards the nearest terrain object. This is fine control scheme for a third person viewpoint.... However, in my project there are sequences in which the camera pulls back to be normal to the XY plane with the Z axis traversing "through" the camera's view. Essentially, the game has segments where it turns into a 2.5D platformer. When this happens, I would ideally like the player to control their character just as if it was a platformer in which joystick movements don't represent a rotation and a velocity, but a target in world space the character moves towards while maintaining its orientation in relation to the object it's "stuck" to. Also, the character's movement is constrained from to the XY plane.

I've attempted to create a diagram to illustrate the above:

If it wasn't clear, the cylinder represents the player character.

So, what I'm looking for is an elegant way to turn the player's joystick movements (representing a target vector in world space) in the 2.5D platforming section into a rotation about the character's local y and velocity along Z.

The problem is simplified a bit in that in the platforming sections, the character need only face sideways to the camera.

I've been trying to convert the vector created by the joystick axis inputs into a local target for the character, but have been failing spectacularly. Any help or advice would be appreciated, preferably in C#.

Thank you all so much in advance for you help regarding this problem