Cactus Game Design Message Boards

Potiphers wifes special ability is not negated and the block is successful so yes.

Potiphar's Wife will not capture a male Hero if she is discarded to Failed Objective.

PW must defeat the Hero to capture them.  Although the block is successful because FO protects the Souls from rescue, Potipher's Wife is the one who is defeated.  The Hero wins the battle, it just happens to be a battle challenge instead of  rescue attempt.

Potiphar’s Wife
Type: Evil Char. • Brigade: Gold • Ability: 2 / 2 • Class: None • Special Ability: When character defeats a male Hero in the Field of Battle, the Hero is taken prisoner and placed in your opponent's Land of Bondage and treated as a Lost Soul. • Play As: All male characters defeated (by a win or stalemate) by Potiphar’s Wife in battle are taken prisoner and placed in your opponent's Land of Bondage and treated as a Lost Soul.

Failed Objective
Type: Evil Enh. • Brigade: Gold • Ability: None • Class: None • Special Ability: Discard all Evil Characters in battle. All Lost Souls are protected from being rescued by Heroes this turn.

I thought that it was considered a defeat because the evil character prevented the hero from rescuing a lost soul?

If the Evil Character wasn't discarded in the process it would be considered a defeat.  Because the Evil Character is discarded and the Hero lives the Evil Character is the one who is defeated. 

A stalemate also counts as a defeat for the Evil Character.  If you block any male Hero of 5/* or less with Pot's Wife and play Wonders Forgotten the battle ends in a stalemate and she will him.