Here's the deal (highlighted the important part):

00X00
00000
00000
001Y2
00345

X is the attacker, Y is the target. X makes an attack (3 range) that deals knockback. What are the legal directions for the knockback.

1) closer on the horisontal line
2) further away on the horisontal line
3) closer on the horisontal line, but further away on the vertical line.
4) further on the vertical line
5) further on the horisontal and vertical line.

Logically speaking the knockback path would be either 4 or 5. But legally speaking, would 3 be a possibility as well, because while you move the target closer on the horisontal line, the vertical line changes as well? Previously X needed a 3 range to hit Y, but now he needs a 4 range. Wouldn't that make the target farther away? So can you choose the knockback path number 3, or do you need to use the "logical" paths?

Also, when making a multiple target ranged combat attack, can you choose another target if one of the targets becomes unavailable (due to Shape Change, etc). Green Arrow has 3 arrows, and is facing 4 targets. GA targets 1, 2 and 3, leaving 4 alone for now. One target successfully uses Shape Change. Can Green Arrow now choose number 4 as his third target, since one of his targets isn't available anymore? Or does he need to make the attack on the two remaining targets?

3, 4, and 5 are the only legal paths.

The best way to think of it is that the KB path must be one of the paths which, barring interference from figures or terrain, would end up furthest from the attacker. In HC, distance is measured in squares.

Another diagram:
A hits T, causing KB and T takes 2 damage

. . . . . . .
. 1 . 2 . 3 .
. . . . . . .
. 4 . T . 5 .
. . . . . . .
. 6 . 7 . 8 .
. . . . . . .
. . A . . . .
. . . . . . .

1 - 6 squares from the attacker
2 - 6 squares from the attacker
3 - 6 squares from the attacker
4 - 4 squares from the attacker
5 - 4 squares from the attacker
6 - 2 squares from the attacker
7 - 2 squares from the attacker
8 - 3 squares from the attacker

Since 1, 2, and 3 are all 6 squares from the attacker, all are valid. Anything else is not valid.

No. The entire action needs to be rendered illegal before he can switch the action.

Thanks, all I needed to know. Rep.

You must spread some Reputation around before giving it to Harpua again.
Darn you for being so good.

That's what she said.

Oh, so that has happened to you as well.

why would 2 not be an option? The character would still end up "farther away" from the attacker and thus satisfy the requirements of the text. Harpua states "farthest" but I don't see that word in the text, at least as it relates to determining how this type of knockback is determined.

2 is not farther away in the OP's example.

Y begins 3 squares away. 2 is 3 squares away.

From FF Rulebook p. 9
The lateral path is not farther away when the attacker starts out horizonatally farther away then he is vertically away from the target (plus the KB distance).

I guess my point was, TECHNICALLY, the KB'd character would be FARTHER away, he just wouldn't be "MORE SQUARES" away. I realize I'm nitpicking a bit, but I was just looking for clarification

This WK thread should help, too.

http://forum.wizkidsgames.com/showthread.php?t=160089