Questions about multiplayer mode:

1) What happens if a player dies (either by threat or all heroes dead) in quests with separate stage areas, like in Escape from Mount Gram (during quest 2B, before joining any player)? Where do the encounter cards from that player go?

2) What happens when a player dies (either by threat or all heroes dead) and is in control of an objective-ally, like Amarthiúl or Iârion, who have the text: "If Amarthiúl/Iârion leaves play, the players lose the game." ? Is it insta-lose, or does the objective-ally pass under the control of someone else?

1) Generally the rules don't specifically define what happens when the only player at a separate staging area is eliminated. However, in Breaking of the Fellowship, the following line is included in the rules booklet: "If a player is eliminated while at a separate stage, that stage is discarded along with all encounter cards at that stage." So, perhaps you can apply that to other quests with separate staging areas.

If not doing that, the most rules-strict interpretation would be to do nothing. Leave the staging area where it is. Nothing instructs you to discard anything, or merge staging areas with the surviving players. You could return engaged enemies to the eliminated player's staging area, I suppose, but they would just stay there. During the quest phase, you would reveal 0 cards because there are 0 players at that staging area.

2) This is an automatic lose scenario.

22 hours ago, Rajam said:

2) What happens when a player dies (either by threat or all heroes dead) and is in control of an objective-ally, like Amarthiúl or Iârion, who have the text: "If Amarthiúl/Iârion leaves play, the players lose the game." ? Is it insta-lose, or does the objective-ally pass under the control of someone else?

GrandSpleen is totally right, but here's a primary source…

On 10/28/2017 at 10:56 PM, Rajam said:

1) What happens if a player dies (either by threat or all heroes dead) in quests with separate stage areas, like in Escape from Mount Gram (during quest 2B, before joining any player)? Where do the encounter cards from that player go?

"Hi Rajam,
If a player is eliminated while at his own stage, each encounter card at that stage is discarded and the stage removed from the game.
Cheers,
Caleb"

Now it's official!

We were playing Nightmare Mount Gram once and my situation was so bad that it was clear that the best approach was to deliberately lose before my partner could arrive at my stage and have to deal with all the nonsense that was piling up.

4 hours ago, NathanH said:

We were playing Nightmare Mount Gram once and my situation was so bad that it was clear that the best approach was to deliberately lose before my partner could arrive at my stage and have to deal with all the nonsense that was piling up.

One of the hardest nightmare quests I've played. The only way I could win was with a Caldara deck using Arwen as the starting hero to generate resources faster. The second deck (a Gandalf-Elrond-LDenethor, with Elrond being the starting hero) was never able to get past 3~4 rounds