1) Can you trace a line with breath out from the play area or through a door / blocked space. Our shadow dragons had cornered two villagers against the door with blocked spaces on both of the sides of the door. Tracing a 4 space line would have turned the breath against the dragon itself. Is that the only way to do it?
No, you cannot trace fire breath through doors or walls. What you're doing here is "counting spaces," the rules for which are described on page 13.
The Shadow Dragon's fire breath ability says to "trace a path … in any direction." FFG has officially clarified that the path need not be a in a straight line, therefore if you really don't have enough room, you can just trace back along the spaces you've already counted before. Note that "all figures on this path are affected by this attack." I would read that as "all figures are affected once, even if you choose to retrace the path over the same space twice. Basically, you're defining an Area of Effect, and then once it's defined, everything inside gets hit.
Of course, you COULD trace back onto the Shadow Dragon itself, if you wanted to for some reason…
2) Anorher debate occurred when necromancer exploded his reanimate adjacent to Splig the Fat Goblin. Does Splig get to use Not me! (card states he is attacked). In a way Splig is affected by an attack and has to roll defence dice (OL's version) but also Splig isn't the direct target of the attack, because necromancer attacks the space containing the reanimate. I think the same answer for this question can be used with blast as well. (Hero's won the debate.. this time.. and no awareness throw was made with Splig). Correct way?
Splig's ability reads that each time he is attacked, a monster adjacent to him becomes the target of the attack. If a monster adjacent to Splig has become the target of a Blast attack, the attack will hit Splig anyway. The only question is whether or not he can move it off some other figure on the other side of himself.
The lack of the word "target" in the triggering condition implies that it can be used on any attack that affects Splig, although the fact that the adjacent monster becomes the target would suggest to me that Splig must be the actual target in the first place. Doesn't make much sense to me that he can randomly change the target of an attack that was never targeting him in the first place. But I suppose that's open to debate.
If FFG has answered this one officially, I haven't noticed it.
3) Last question is about blood fury or what ever was the OL card with (make 2 attacks and the monster is defeated). OL attacked with a master ogre (with frenzy I might add), then used that blood fury attacked twice again and then used the undying ability of the master ogre and replaced it with a minion ogre. Question is about the monster to be able to use undying with blood fury card played?
Yes, the ogre can use Undying after Blood Fury. "Defeated" is "defeated" is "defeated." The card doesn't say anything about monsters with Undying staying down for good, so they don't.