A figure with the Shadowcloak ability is only affected by attacks made by adjacent figures. The figure does not suffer any wounds or effects from attacks originating farther than one space away.
Q & A Edit
Q: How does Shadowcloak interact with Blast? Is the origin of the attack considered to be the attacker or the space from which the Blast originates?
A: The origin of the attack is still considered to be the attacker. If a hero with a Blast attack wishes to hit a Shadowcloaked monster without hitting himself, he should move adjacent to the monster and target the attack in a (potentially empty) square such that the monster, and not the hero, is hit.