I have looked all over the forums for this one, but cannot find an answer -- I think this is a common question but I'm not sure -- if Gandalf takes some damaged after a sneak attack, does he go back to your hand with damage, or does the damage dissolve and he comes out fresh for his next use?

When a card leaves play for any reason, all tokens on it and any stuff attached to it gets discarded, unless specifically instructed otherwise.