The title says it all. If the only creature between me and my target is prone does the target still gain the benefits of soft cover?
Sort of. From the SRD :
Low Obstacles and Cover
A low obstacle (such as a wall no higher than half your height) provides cover, but only to creatures within 30 feet (6 squares) of it. The attacker can ignore the cover if he’s closer to the obstacle than his target.
Yeah, but even that is a bit ambiguous w.r.t. a prone creature that doesn't take up the whole square and (likely) isn't moving around as it was when standing. It actually reads like a GM interpretation. An elephant drops and you get cover, a Halfling drops and you're out of luck.
Nice edit. I was about to comment. :)
You could use the rules for a tiny creature for a prone creature , two sizes cuts it to a -2, three sizes or more = no penalty.