If you place all four barrier markers around a character, can they still escape (if it's indoor for flying, or outdoor/indoor for non-flying). I only ask, despite the fact that characters can move diagonal, because it's blocking touching blocking, so it's like the corner of a wall.

They are trapped. A segment of the terrain needs be destroyed.

This is also true of barrier adjoining blocking terrain or walls. You don't need to "diamond" somebody with all 4 markers.

If the character is outside I was under the impression they could just fly out. Indoors however is a different story since the Blocking Terrain exist on all elevations.

Just don't forget that things like phasing/teleport and leap/climb will still allow them to escape

That's true, but he specified non-flyers for outdoors. Figures with L/C or Phasing could hop out or phase through, for that matter.