I think it's because rc.local does things in the background. Whereas when you're logged in and doing it manually you're very much in the foreground.
Try this :
DISPLAY=":0" mplayer -fs LizardPorn.mp4 -loop 0
Though display number might be wrong because you're not on the default, fiddle with that yj
Or try some sort of autologin (which I think you did with the lonely project)
EDITED: 15 Jun 2016 15:06 by ANT_THOMAS