How does Block Chance actually work?

I have including buffs,a total of 90 Block Chance,which I assume converts to 90% chance to block.
The tooltip says: "Block chance affects how likely you are to (mostly) block what you deserve,at least so far as physical attacks go."

Various situations I block:
1.For most creatures whenever I get a Block(Block message pops up) on the log it says "The attack has no effect",so the entire attack is mitigated.
2.Some creatures,including Big Blue(Fat blue daemon level 8),even though I block,I get hit for some crushing damage.
3.From other creatures,even though I block,I get hit for a lot of piercing damage,however it may say 20 damage dealt on the log but when I check my health only half(10) of it is substracted,which is strange since I don't have any piercing reduction stats.

So at this time I'm confused, what does block chance actually block as far as physical damage goes?
Does it block all the physical attack types, crushing,slashing,blasting and piercing?
Does it block the physical part of the attack completely 100%,or does it block only an amount base on your level or other stats?

Added Images for Piercing:
http://imageshack.us/photo/my-images/32/beforeattack1.jpg/
http://imageshack.us/photo/my-images/829/afterattack2.jpg/

 

I don't actually know but I'm going to make some guesses!

I think chance of blocking is not a flat percentile but a percent based upon the level of your opponent relative to your skill rating.

I think the amount of damage you block IS a flat percentile based upon your block rating (90 Block prevents 90% damage)

I think your damage reduction applies BEFORE your block percentile is checked. (20 armor and 50 block reduces 50 damage to 30 which is displayed to you, and then cut in half to 15 actual damage)

 

Yes that's what I was thinking as well but look at my situation 3. , the log says 20 piercing damage received but actually only 10 health is reduced.
Either the log is bugged, or something else is going on.

 

You've got the highest block I've ever seen, so let's ask some probing questions!

Do you feel like you block almost every hit or does it seem less often?
Is the amount of damage you take from sources you have no resistance from always half?

 

I have now reached 102 block chance with buffs on, I get non-stop blocks but still get hit by piercing damage as far as physical damage is concerned.
In the log it says "8 piercing damage" and I really receive only 4, 20 piercing and I receive only 10,it's always half.
Magic damage caused is both correctly mentioned in the log and removed from the health bar.

Here is me getting hit for 8piercing but receiving 4 damage.
http://imageshack.us/photo/my-images/32/beforeattack1.jpg/
http://imageshack.us/photo/my-images/829/afterattack2.jpg/