Ok 2 questions,
1) does a grounded fig. have Line of sight under hovering figs. friendly or adjacent?
2) Can flying be outwitted, I think i read somewhere that it can but want to be sure.

I can answer number two for you....You can outwit Soaring....But can't outwit Flying

No. A hovering character still occupies that square and still blocks LOF.


Like Komixfrk said, you may Outwit the ability to Soar, but you can't Outwit flight (Yes, there is a difference. Check the rule book undering 'Hovering' and 'Soaring' to see.).