Or (4) the DM narrates the damage as the character perceives it, and as it appears to others, at the moment.I claimed that the 4e damage and healing paradigm consistently and frequently gives rise to absurd situations in the narrative unless
(1) One chooses not to describe any damage until it has been healed,
(2) One retcons the narrative, or
(3) One simply chooses to close one's eyes to the absurdity (which does not actually make it go away; though it might make it go away for you).
"Grabthar was pierced in the chest, it hurts like the dickens, there's a lot of blood, take 20 points of damage".
Whether that blow pierced a lung or nicked an artery doesn't need to be resolved immediately. Injured people frequently do not know the actual extent and severity of their injuries until some time has passed --particularly when their blood is up, as in professional sporting events or lethal combat.
There, problem solved. No retconning needed.
Also, on the subject of absurdities... it's with a wry smile I realize that every campaign I've played in narrated damage wrong. Wounds were always described as severe --absurdly severe, even-- based on the damage total rolled, not on how close the character was to zero HP. Every single campaign I've played, or run, featured absurd damage narration. Even in the more serious ones combat frequently sounded like an Itchy and Scratchy routine, a celebration of cartoon-level hyper-violence...
... now I can't be alone in this, can I?