Jimlock
Adventurer
#2 wouldn't make much sense then, would it, if applied to a flame strike spell?
It would make sense, because the caster could position the point of origin outside the AMF, even if he stands inside the AMF. Normally (without IoM that is) a caster cannot pull this off. Don't forget that both #1 and #2 are based on the axiom that the act of "casting" is inherently magical, meaning that a caster cannot cast a spell while standing in an AMF.
OTOH, if you play IMF strictly per RAW (meaning that a caster can cast a spell while standing inside the AMF), then I guess that IoM has a different effect. In that case only #1 applies, which means that he can direct a Flame Strike's point of origin inside the AMF, and the spell would still function as if there never was an AMF.
If you're stuck in a dead magic zone you don't have much use for spells with durations unless you are skittering along the edge of the zone intending to be able to hop out when you need to as the spells will likely run out by the time you exit. So at least in the case of dead magic zones its clear to me this was meant to give a cleric at least a prayer of having spells function at that critical moment when they are needed most.
Correct. Dead magic zones can be pretty big (not always, but they can), in which case #1 seems the only correct answer. Don't forget that I was/am supporting #2 in respect to balance, not in respect to what makes more sense.

Don't know if you've figured it out already but I'm trying to find a ruling for both AMF and IoM so that I can apply them to my games (no matter if I am the DM or a player).
What me and my friends were already doing is that we treated AMF as an effect that blocks everything, including the act of casting. This is not changing. We 're keeping that, even if it is a house rule. Honestly I cannot imagine the act of casting as not being magical.
Therefore we have to treat IoM in respect to that. Thankfully the wording of the feat treats IMF as if it blocks everything, including the act of casting. So only two things remained to be solved: One was the loss of spells after failed Caster Level Checks, and the other was the interpretation/ruling of: If the check is successful,
your spell functions normally.
For the Caster Level Checks, I think that we all agree that a spell is lost/erased-from-the-slot when the caster fails his check. As mentioned before, not only is there no Caster Level Check in the game that let's the caster keep the spell when he misses the check, but this broken feat would be even more disastrous if the caster simply failed without risking the loss of his spell. Done with that.
As for the If the check is successful,
your spell functions normally.
I agree that interpretation #1:
...is the one that makes the most sense (if not the only one that makes sense, especially after your remark on Dead Magic Zones).1) The spell functions normally as if there never was an AMF to suppress it/affect it.
However, I'm sticking to #2:
...for purposes of game balance.2) The spell functions "normally", as in: it is cast (without the feat that wouldn't be possible) and the AMF affect it normally. A spell's "normal" behavior is to be suppressed while in the AMF.
#2 works like a charm in the case of an AMF, but in the case of a Dead Magic Zone, its pointless without further tweaking.
Therefore I'm incorporating a second house rule for Dead Magic Zones only (The first being the fact that the act of casting is inherently magical... remember?

In a Dead Magic Zone, an IoM can attempt to cast spells with an "Instantaneous" or "Permanent" duration. On a successful Caster Level Check the spell functions normally whereas on a miss he loses the spell. Spells with Timed Durations (from rounds/level to days/level or more) have NO effect whatsoever, because the IoM CANNOT keep in touch with the Weave for a long period of time.
Picture this as if the IoM, with the help of Mystra, can MOMENTARILY pierce the Dead Magic Zone around him and cast a single spell with an instant effect. He cannot keep the Dead Magic Zone "open" for longer periods of time in order for the Weave to function properly.
I've already played IoM and Dead Magic Zone in a similar way (although not in a way as clearly defined as above) with my group and it worked out nicely. It was for a single session, so I cannot be sure if this house rule is implication-free... but for now it seems ok.
And I agree that the feat is pretty powerful, but the ability to overcome antimagic/dead magic is highly situational and more of a fringe benefit than anything else.
Think of a Cleric of Mystra with IoM, who at 11th level casts AMF on himself (AMF = 6th level spell for the Magic Domain) and who starts casting every spell possible from within the protection of the AMF.
Moreover, don't forget that he can always keep the caster level of his own AMF down to 11.
You can cast a spell at a lower caster level than normal, but the caster level you choose must be high enough for you to cast the spell in question, and all level-dependent features must be based on the same caster level.
This means that the chances of overcoming his own AMF get bigger and bigger, and at high levels it becomes a joke.
As for the 20 + spell level DC of the Dead Magic Zone, it's even more of a joke.