Bishimons Blessing + free raises.
Okay, say you're a Bayushi Bushi with 5 kenjutsu and 3 air ring and are attacking someone who missed you last turn. This gives you 4 free raises to your attack roll. Say your opponent is TN20 to hit. Could you drop his TN to 0 with the 4 free raises then declare 4 raises for damage? Bringing the TN right back to 20 where it started but giving you 6 for damage instead of 4? Or can't you reduce then raise it again?

OK, so in the above example, Mr. Bayushi dude would get 3 raises (his air being 3) for the "To hit" roll", but 4 effective raises for the Damage roll? The net result being he uses 3 raises (For BayBR2 ability)to add +15 to his Skill roll to hit, and 1 raise (from BishB) for damage?

Step One: Declare Raises. ~~~~~3 Free Raises to increase my final roll result. (Bayushi Rank 2) ~~~~~1 Free Raise to increase my final roll result. (Kenjutsu 5) ~~~~~4 Real Raises for damage, increasing my opponent's TN to be Hit by 20. Step Two: Determine Success. ~~~~~Roll dice, determine kept dice. ~~~~~Does your total roll exceed the opponent's TN to be Hit? ~~~~~If not, miss. ~~~~~If it does, go to step 3. ~~~~~If it does, gain 2 Free Raises that may not increase the final result of your attack roll. (Bishamon's Blessing) Step Three: Determine Effects ~~~~~Check for combat manuevers, none unless you use the free raises from Bishamon's Blessing to perform a manuever. ~~~~~Calculate Damage (3k2 Katana, 2k0 Strength, 2k2 4 Raises for Damage, if you use the FRs from Bishamon's Blessing for damage, then this increases to 3k3) 7k4 or 8k5. ~~~~~Roll damage and apply.

As per Shawn's ruling, you can use the extra Raises from BB before the result of your attack is determined. For instance, if you have BB you can use the Extra Attack maneuver by calling only three Raises, since those would give you an extra Free Raise for a total of four. I know that's not how I read the advantage myself, but his post in the 3rd ed rules questions thread on the Alderac forums is quite clear.

Right, Bishamon's Blessing has the ability to time-travel and change your earlier choices. Another reason why I hate that ruling. "Instead of a legshot, due to hitting your leg I am now doing a headshot!"

No, you don't declare a leg shot which gets turned into a possible head shot by BB - you declare a head shot, but BB makes it cheaper. BB reduces the number of raises you need to call. Which is why there's no way I'm allowing this as a 3-point advantage in my games.

Bollocks. By default, it does something. What that something is is up to the GM, but it's not nothing.

I usually count called shots as additional damage if there is not a stated goal that the player wants to accomplish with the called shot (ie tear a hole in clothing).

It does not, indeed, mean that there is no effect. What it does mean is that there is not a shared definition for what a head shot constitutes mechanicly. As a GM I may state additional damage, you may state higher TNs to Hit because of blood in eyes/concussion, someone else may say it does nothing. Another GM may say it's an instant kill. All interpretations are valid within the context of their own game. What it does mean is that since it is not strictly defined, these effects are a home grown ruling, and this forum does not deal with those. In context of Bishimon's Blessing, it's these "home grown" results that can more easily break a game. I'd recommend to anyone looking to use home grown rules consider the effects BB would have. Chances are it will make potentialy game breaking combos more likely. Yet another reason to disallow it as an advantage if you home brew a lot.

Balancing an actually mechanically effective headshot would be a nightmare. It's for cool cinematics, not ignoring the Hida's techniques to one shot him.