There's something else I thought I'd mention that might be relevant to the discussion. I just remembered it now and retested it to confirm it.
You can modify the XYZ coordinates of specific spells for specific Creatures. Changing the X / Y coordinates does cause the spell to properly fire off from coordinates relative to the direction that the Creature is facing.
However, there is something else. You can also add Lights to Creatures. The Firefly has an orange glow and the Lord (oddly not the King if I recall) has a white light, and Imps have a player coded glow. Most of this is unnoticed because vanilla DK2 is so incredibly bright, but anyways... You can also change the XYZ coordinates for the lights, however, unlike spell offsets, it is not relative to the Creature's direction. It is absolute, as if the Creature is facing north.
The light over King Reginald is the Hand-of-Evil, as I wanted to show his direction in the dark water. The upper light is the one that King Reginald is emitting. I set the X coordinate to be 2.5 tiles away from him.
This, I think, would support the backstab mechanic theory and that DKII is incompetent enough to screw even the light coordinates up. I don't know why the light coordinates would be set to absolute instead of relative to Creature direction as that just seems weird.