I should be able to answer this one, but for the life of me I can't find where it is in the rulebook. I had a match where a Deadpool tried to target my Joker. The LoF to Joker is blocked by Metallo, but the LoF to Metallo is blocked because he's behind blocking terrain. My understanding is LoF is measured center-to-center. Where it not for Metallo, the LoF would be clear. Someone told me that if a figure can't be seen, then it is not considered for LoF purposes. I find this to be realistic, but can someone point me to where this is mentioned?

I think line of fire is blocked by characters unless you have IT: ignores characters.
so:

1 # # # #
# # B 2 3 #
# # # # #

if 1 can't shoot 2 because of blocking terrain(B) and he can't shoot 3 because 3 is blocked by 2, then he has nobody to shoot, even thought it looks like he should be able to hit Someone.

It is not mentioned anywhere because there is no such rule. A character blocks LoF even if an unblocked LoF can't be drawn to it.

Keep in mind that a figure can not block LoF to itself.

Metallo does indeed block LoF to Joker in the example given, but if it was a peanut based figure occupying those two squares instead of two single-based figures LoF would be clear.