Just a quick question on the timing for damage application and healing in the game. Let's say someone flames of tzeentch my units for 2 damage each. When is this 2 damage applied and can I use tears of isha to heal all damage on them before they die?

Damage is assigned and applied when the Action causing damage is resolved. There is no way to heal a 2HP unit targetted by Firestorm, the unit will die. In order to heal, the unit needs to survive the application of damage. Healing removes damage that is already on the unit card, but that damage only goes on the unit when it is applied.

Also, in your example you were talking about a Tactic. This deals non-combat damage, which is always assigned and applied with no action window in between. As soon as it is applied, the unit has zero HP remaining and immediately dies, as Dam said.

Even if the unit was receiving 2 combat damage, and had 2 HP, it would still not be able to be healed, again for the reasons Dam stated.