Episode was a bit weak. I'm a little bit confused as how this show can come out with epic episodes like the Dicelord/Fear ones and then occasional have stupidly gory, childish in joke fests with a little bit of gamer humour thrown in for good mesure.
ANYWAY. WILD THEORY TIME: On the subject of invunerability.
1) God Mode. Unlikely, in the episode in which they activate god mode Lund and Shanks are blocked from leaving by a warning message. The implication is that they had to switch it off. More to the point, God Mode would trash any sense of dramatic tension and just plain be a cop out
2) Mercer Inverunerbility. I thought it was likely before. Less so now. Seeing as before the implication was that Lund got one gift and Shanks got another. Memory and Regeration respectively.
3) Micheal Poison backfiring. Plausible, but seems a bit...obscure. Seeing as there's been no futher referance to it since that episode.
4) Lund and Shanks stats being high in comparison to Toads. More likely, given the amount that 19 was talking about stats and there effect on events. The two snags I see with this is that the Dicelord didn't comment on their Constitution stat, only a very high luck. The other big drawback is that they aren't in RPG world any more, so the same rules might not apply any more. Toad it's an RPG gaming abstraction, which whilst it doesn't stop him from being a ***** means he can't really have stats.
5) No damage due to friendly fire. This fits nicely assuming they are on the same side for some unknown reason, given that the TF2 abstraction fits, the guns are the same. It's weird that they died from the first shots, but it could just be dramatic lisence.
I'm going with 4 or 5 right now. To me them being on the same team is the -most- likely possibility given that Toad really resents Mario/Luigi and it implies an allience with anyone else who has the same feeling.