The whole point of blocking someone is so that you don't have to see them around, right? Well, I can still see what people on my ignore list post on the forums, and naturally it's no less grating than what they say in chat, so I think it should be fixed to block the blocker from seeing the blockee's posts as well as their chat messages.
We should also be able to decide whether to allow them to post in our threads (most other sites I go on don't let you post in someone's topic if they've blocked you). Some people might not want people to know they've blocked them, while others just don't want them around, period...so I think it should be a choice.