Okay, in a mod with my new level 1 ranger we were fighting skeletons down a hall, I was told that in order to hit this skeleton (m) that was in melee with an ally (a) I (i) would take both the -4 shooting onto melee as well as the -4 for cover that my ally was granting to the mob.
I don't think these should stack, since in essence it's like penalizing me twice for the same thing. and a basic board setup looked like this;
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(m)(a) (i)
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Now honestly, I never played 3.5 (haven't played since '94 with 2.0 rules.) so the group I play with know the rules better than I, it's just that this seemed really odd to me and put me at a -8 to hit and could only hit the skeleton with a roll of 19-20, which for a first level mod just seems kinda out of whack.