Wow, awesome insight phiefer3, thanks for bringing that to light. That does explain things a bit more.

I was trying to think of some chaotic situation, like if you had a Dark Jeroid with Blast With Chain equipped to it attacking a face down Jinzo...Jeroid is at 1700 with the chain, but does Jinzo's effect kick in during damage calculation, reducing Jeroid's attack to 1200, or does it remain. If it does remain, do we then get to apply other traps to the situation, since once a monster is declared "destroyed", it's effects no longer are valid (minus the flip type effects) and the monster serves as a "shell" until the "move to graveyard" substep.

Fun fun 8^D

Once jinzo is flipped blast with chain would be negated, and jeroid would go back to 1200. just like if you attack a face down star boy, it's effect still boosts it's stat immediately.

Another sign that jinzo would start negating traps immediately would be the fact that if a face-down jinzo is attacked, you can't activate traps during damage calculation. There aren't any rulings that directly support it, but it would be common sense.

The only continuous effects that seem to be put on hold are those that would take the attacked/attacking monster off the field during the damage step. (obviously triggered/ignition effects can still do so, like drillroid).

It may be that these continuous effects are put on hold for the same reason that monsters destroyed by battle are also held on the field instead of immediately going to the graveyard.

Hmm, that still doesn't sound like a good reason.