This is a problem with most chat systems, where you see one sided conversations. Luckily SO cuts down on the confusion with the @username format.
I oppose blocking the messages from a user who is replying to a blocked user, as you may be missing a good message. After all, you're not blocking the replier. What I propose as a compromise is a way to highlight that the replier is replying to a message from a user who you have blocked. One way of doing this might be a
red strike through in the @reply. For example:
@imajerk I don't think we should revive Hitler and make him our president.
(Except the @name would be red)