Schrodinger's poor cat...

This whole story about schrodinger's cat gives me the creeps...
either one believes that its only an analogy for the uncertainty principle and a very bad one at that or that there is something strange about the uncertainty principle itself.

Suppose we extend the usual experiment to be performed as follows...
The observer+box system is further enclosed in another box. Call the inside box B1 and the outside box B2. Also, outside B2 is another observer. Call the inside observer O1 and the outside observer O2.

Now, suppose that O1 open box B1 to find the cat dead. O2 is obviously unaware of what O1 observed. After a predetermined time, O2 opens the outer box B2 followed by the inner box B1. Is there any possibility of O2 finding the cat alive? Doesn't sound reasonable to expect this.

But now the trouble is this...for O2, the outcome was fixed the moment O1 found the cat dead. The wavefunction had already collapsed before O2 opened the box.

It can be claimed that the cat wavefunction collapsed because O1 observed it. But then, why is O1 privileged. Couldn't the box B1/B2 'observed' the cat? Or does the observer have to be alive? But then, what is the meaning of 'alive'?

Or perhaps we need to rething the meaning of conditional probabilities...and prior probabilities, posterior probabilities....etc etc.

But then again, the experiment could just be an extremely bad analogy for the real thing. However, is there a special status for the observer in quantum theory? Why is that?