I attack with John I attack with John (H deck). You block with Strong Demon (H deck). I have King of Tyrus in my territory. I play Cast Out Demons to discard you (Discard a Demon in Play), and am now 10/9 . You play Denying Blame, and redirect the enhancement to discard King of Tyrus, and now you are 12/11, I am 7/8.
I attack with John (H deck). You block with Strong Demon (H deck). There are no other demons in play. I play Cast Out Demons to discard you, and am now 10/9. You can interrupt COD with Denying Blame, but since the ability is non-optional, and you have the only demon in play, you are forced to discard your own Strong Demon.
Essentially, redirect (which must be preceded by interrupt) makes it as if the enhancement were played on your character. So you get to use the ability from your perspective, and you get the numbers as well. Non-optional enhancements that are redirected must target a valid target, even if would be detrimental to you (as in my second example) so it's not always wise to play a redirect. Optional enhancements can be used or not at the redirector's discretion. If someone has Warrior's Ram's Horn up (lol), which stops redirects from being played, or prevents them or something, then Denying Blame would do nothing but interrupt (which is useless, unless you need to get rid of Denying Blame for some reason).