Let's say someone draws a monster face up when they kick open the door. They are able to defeat the monster, but another play throws down a card to buff the monster. The person who kicked open the door counters. Now someone else buffs the monster. This repeats until everyone runs out of cards. What is the general rule for this situation? Can it keep going or are we doing something wrong?
it can keep on going until nobody can/wants to throw any more cards. As seen in the rules(example, p. 5):
Example of Combat, With Numbers and Everything
Aric is a 4th-Level Warrior with the Chainsaw of Bloody Dismemberment (which gives him a +3 to his combat strength). He kicks open the door and finds the Net Troll, a Level 10 monster. Aric’s at a 7, the Net Troll is at a 10, so Aric is losing.
Aric: I was hoping to save this card . . .
He plays the Magic Missile, giving him +5 for this fight. Now his combat strength is 12, beating the Net Troll’s 10.
Aric: Ha! Net Troll going down!
Suzan: Not so fast. Now he’s Enraged.
Suzan plays Enraged, adding 5 to the Net Troll’s combat strength. Now Aric is losing, 15 to 12.
Suzan: Want some help? (Suzan is playing a Level 2 Elf with the Boots of Butt-Kicking, so her combat strength is 4. Combined with Aric’s 12, they would have 16, enough to defeat the Net Troll’s 15.)
Aric: And give you a level? Not a chance! I’m Berserking.
Aric uses his Warrior power and discards three cards: Thief and a Wandering Monster from his hand, and Yuppie Water (usable only to help an Elf) from his carried items. Each one gives him +1 to his combat strength.
Suzan: Not the Yuppie Water! Noooo . . .
Aric: That’s +3 to me, and now we’re tied, 15 to 15. Because I’m a Warrior, I win ties . . . so I’m killing the Net Troll unless someone else plans to mess with me. Anyone?
No one says anything, so Aric goes up a level and claims the Net Troll’s treasures – three from the Net Troll card, and one extra because it was Enraged. And the game goes on . . .
As you see, you can cast any number of spells during combat.