1) If the Xnotify dialog is open (either minimized or hidden by other screens on top of it), then when selecting XNotify in the menu, I want the dialog to be used (same as if selecting XNotify - Dialog) but without having to make that second selection.

ie: I only want the Menu options to show if the dialog is closed.

Hopefully one of the two descriptions above will make this clearer.

2) thanks for the code and the note.. reading your note and then checking my actual code made me realize that I had posted old code. My apologies. Here's the correct code for the block alias as I currently have it. I don't know if this will make a difference to your suggestion or not.
Code:
alias -l block {
  if !$isid {
    if $3 {
      .hadd -m $hsh(XNotify) $+($1,.,$2,.,$3) $iif(!$hget($hsh(Xnotify),$+($1,.,$2,.,$3)),$3)
      echo -a $3 on $2 ( $1 ) $iif(!$hget($hsh(XNotify),$+($1,.,$2,.,$3)),Un-) $+ Blocked from XNotify
    }
    elseif $2 {
      .hadd -m $hsh(XNotify) $+($1,.,$2) $iif(!$hget($hsh(Xnotify),$+($1,.,$2)),$2)
      echo -a $2 on $1 $iif(!$hget($hsh(XNotify),$+($1,.,$2)),Un-) $+ Blocked from XNotify
    }
    else {
      .hadd -m $hsh(XNotify) $1 $iif($hget($hsh(Xnotify),$1),$1)
      echo -a $1 $iif(!$hget($hsh(XNotify),$1,Un-) $+ Blocked from XNotify
    }
  }
  else {
    return $iif($hget($hsh(Xnotify),$+($1,.,$2,.,$3)),$v1,$iif($hget($hsh(Xnotify),$+($1,.,$2)),$v1,$iif($hget($hsh(Xnotify),$1),$v1,$false)))
  }
}


Regretfully testing your suggestion shows that the menu option always shows as Block and the echo always returns Un-Blocked.