We are pretty sure we got this one right... and maybe it was just late at night and brain function ceased.

QD has kylo condition (blinded), full health. takes 2 hits and a crit, rolls blanks. 2 shields come off, crit gets delt as a blinded pilot. QD does not have initiative.

Does QD get his "retaliation" attack before the crit effect takes place?

We ruled it as the Blinded takes effect, he cannot shoot, flip the crit.

That seems correct to me. The Blinded Pilot critical is resolved before Step 8 in the Flow Chart, which is when Quickdraw would perform the retaliation attack. As such, QD is blinded, and may use the opportunity to attack granted by losing shields in order to attack.

The Blind takes place during step 7, deal damage. His attack doesn't happen until step 10. So yeah, he's blind before the attack.

You get to choose, actually. You can either choose to not retaliate, and thus hold the Blinded Pilot (which would be a stupid decision, but hey, whatever floats your boat), or activate your retaliation ability, and flip Blinded Pilot instead.