Wizkids Rules!

Iron Will: This character cannot be KO’d unless it was previously damaged this turn or if it is simultaneously damaged by two different sources.

What happens when a character like Steel: John Henry Irons (Iron Will) is fielded on his level 1 side [3A/2D]
and your opponent has Vulcan: Aggression "While Vulcan is active, your opponent's non-fist characters get -2D" ?

Steel's Defense becomes zero [0], but according to the rules of Iron Will... he cannot be KO'd unless he takes damage
from another source.

Correct...??

Yes, this is correct.

In the case above, you essentially have an active character with 0D. It's not KO'd yet though... so it could be used as a blocker.

So how would that interact with an ability like Overcrush? Suppose a 5A overcrush character is blocked by a 0D Iron Will character. Please explain how to calculate the amount of damage the defending player would or would not take.

Once the blocker (the 0D Iron Will die) takes combat damage it is KO’d, fulfilling the requirement for Overcrush damage to be applied. Since the blocker had 0D, none of the attack damage is expended (i.e. to bring the blocker to 0D) nor is any of that damage blocked. Therefore, the player would take 5 damage in this situation.

This is consistent with the answers in similar situations from the following rulings:

viewtopic.php?f=10&t=1799

viewtopic.php?f=10&t=4425

viewtopic.php?f=10&t=5861
(refer to the answer for the 3rd question)