The rules read that after every encounter, all surviving characters regain their fatigue to full. Does this apply to the party when they all flee a dungeon as well? Otherwise, they are forced to waste an entire week resting each time they leave a dungeon.

Yes, every week Heroes are at full fatigue.

And while not "official", we've house-ruled that almost all effect tokens go away, like Burn, Web, Sleep, Dazed, etc. Just doesn't make sense that your guy would go around for a week burning until they entered the next dungeon...

The only tokens we keep are Curse and Poison tokens...

-shnar

That house rule is incredibly official.

The FAQ:

"Q: What happens to lingering effects (Bleed, Burn, Curse, Poison, etc.) when an encounter ends?
A: At the end of an encounter or dungeon (but not a dungeon level) all lingering effect tokens are removed from all heroes with the following exceptions: Poison and Curse tokens stay. (Note, however, that Red Scorpion’s healing power means that she will heal all her Poison tokens and then continue to heal until she is at her maximum wounds.)"

Page 11 of the FAQ.

Say after me, "I will read the FAQ. I will read the FAQ. I will read the FAQ."

*sigh*

I *have* read the FAQ, but so many things slip through

Guess I should just reread the FAQ before every session...

-shnar