p44 says blocked minis cant be assigned damage, says nothing about range

If they're within the unit then yes, I believe you can spread the 'damage' to that miniature because they describe it as being every member of the unit being assigned damaged.

thats correct -

basicly, you check to see if every minature has atleast 1 opposing miniature in range of its weapons. The only way the defending unit can ensure a miniature takes no damage is if it is out of line of sight from every model.