Wizkids Rules!

Angel - Avenging Angel has card text that says "If Angel is blocked but is not knocked out, he deals 2 damage to the opposing player".

When does this ability check to see if Angel has been knocked out?

Also, if Angel is blocked, but the global from Distraction is used to remove him as an attacker, does this ability still work?

The ability checks at the end of combat. If Angel was assigned a blocker and then removed from Combat, Angel was still assigned a blocker.
Addressed in the FAQ “17) Q: If Angel attacks, is blocked, and then a player uses Distraction’s Global on him, does he deal 2 damage to the defending player still?
A: Yes. He was blocked, he was not knocked out, and therefore he deals the 2 damage.”

-The Dice Masters Rules Team