So, if a soaring monster is considered 4 extra spaces away, but a breath attack using the breath template ignores range, can the breath atack hit if the monster falls under the template? Can breath be used against soaring creatures at all? How?

Bodah said:

From the FAQ:

Q: How does Soar interact with the breath template? Can Soaring creatures use Breath without having to descend? If a Soaring creature is hit by the breath template, is it actually hit?

A: Breath attacks always ignore range, and therefore treat Soaring creatures the same way they treat any other creature.

Its a 3 dimensional cloud of fire being represented by a 2 dimensional piece of cardboard, don't try to understand it.