Does the -2 hit points to all attackers against the zone the card is in play at count BEFORE the attacker can deal damage or AFTER they deal damage? For example my wife and I played a game and she attacked with three Dwarfs that had 2 hit points apiece and we couldn't determine if the damage the attackers did counted or if they were killed as a result of the Harpie's card before they could deal damage.

It's a triggered action, so you have to use it as soon as possible after its trigger condition has been met. That's the action window after the declaration of attackers, then the zone is considered to be attacked. So the hit point loss happens way before combat damage is dealt, even before defenders are declared.

Note that it targets a single attacking unit though, not all of them.

Thanks for the help!