XXEXX
XXSXX
XXXXX
XXXXX
XXFXX

E=Enemy
S=Stealthed Enemy (in hindering terrain)
F=Friendly Figure

Can F see E thru S, since S is hidden?

No. S is treated as blocking terrain, as per the rules of stealth.

The truth of the matter is this: You cannot see the Stealth character because the hindering terrain is considered blocking terrain ONLY when LOF is drawn to the Stealth character.

When you draw LOF to the second character (E), LOS is blocked because LOF passes through a character base (the one with stealth).

So you cannot see the Stealthed character because he is Stealthed, and you cannot see the second character because the Stealthed character is in the way.

Does it make sense? Not really. But, them's the rules.

So, in short: Nope, you cannot see the character E.