Am I thinking of this correctly:
-Seamus (with the Mad Haberdasher upgrade) and Copycat Killer are in base contact
-Seamus is hit with a ranged attack that does blast damage that could kill Copycat killer
Seamus uses Mad Haberdasher to reduce his damage to 0, then drops the hat, then since Copycat Killer is within 3" of the hat he immediately picks it up and reduces his blast damage to 0 and drops the hat again?