The Walrus Lady is the Spelunker's "reward" for beating custom levels made in the Level Editor.
If the level does not lead to another user-made level, after the tunnel that shows the scoreboard, the Spelunker will find a large cavern.
Inside, he is greeted by a gigantic walrus dressed as a Damsel who blows kisses at him.
The Walrus Lady does not appear if a level is beaten in the test mode, only if the level is saved and loaded in the custom level browser.
The Walrus Lady also bears an incredibly striking resemblance to Madame Tusk in Spelunky 2.