Obstacle, Journeys in the Dark
I - Rules
(see JITD, p. 4, 16-17; FAQ, p. 1, 6)
Pits deal damage to heroes or monsters that move through them.
Pit markers do not block line of sight, but if a hero or monster moves so that the figure is only occupying pit spaces, the figure falls into the pit. The figure immediately suffers one wound that cannot be reduced by armor. A figure in a pit may climb out for two movement points, and is then placed adjacent to the pit in any legal, empty space(s) the owner chooses.
If a hero or monster is aware of a pit, it may jump across the pit for three movement points for each space crossed. Simply place the figure on the other side of the pit after spending the movement points.
Line of Sight
Pits do not block line of sight.
As rectified in the FAQ, figures in a pit can see into the spaces adjacent to the pit (old text was saying that "While in a pit, a figure has no line of sight to any other spaces").
Other figures may trace line of sight to a figure in a pit normally.
What happens when a figure in a pit space moves to an adjacent pit space?
Pit spaces that are adjacent are considered to be part of the same pit. Moving from one pit space to another does not require any extra movement points and does not inflict damage in the same way that entering or leaving a pit does. Furthermore, if multiple figures are in the same large pit, all may trace line of sight to each other as if they were on normal floor spaces. All normal line of sight restrictions still apply, of course.