So I stumbled upon this land, Karakas. Can this return effect reach a card in exile? I read the rules regarding exile, and it appears to me that Karakas' effect (and similar return/play/add effects) are fully capable of accessing the Exile Zone.
Tap: Return target legendary creature to its owner's hand.
Karakas returns a creature. Creatures only exist on the battlefield, everywhere else they are usually creature cards (or spells, on the stack).
109.2. If a spell or ability uses a description of an object that includes a card type or subtype, but doesn't include the word "card," "spell," "source," or "scheme," it means a permanent of that card type or subtype on the battlefield.
So Karakas can not target cards in exile.
No, it can't. Only cards that explicitly state that they can return something from exile can do so. Examples are very few.
- Riftsweeper returns an arbitrary face up exiled card to library.
- Misthollow Griffin can be cast from exile.
- Torrent Elemental can be brought back from exile.
- Pull from Eternity returns an arbitrary face up exiled card to it's graveyard.
- Mirror of Fate swaps your library for 7 exiled cards (any order)
- Runic Repetition returns an exiled flashback card to your hand.
- Venser Diffusion returns a suspended (i.e. temporarily exiled) card to it's owner's hand.
As Jefromi points out in a comment to the answer, Mark Rosewater is not too interested in seeing this as a mechanic that gets deeply developed, because it then becomes a second graveyard. http://archive.wizards.com/Magic/magazine/Article.aspx?x=mtg/daily/mm/194
Note: There are on the order of 30 cards that exile cards face down. Here's a rough search for them on gatherer: http://gatherer.wizards.com/Pages/Search/Default.aspx?action=advanced&text=+[exile]+[face]+[down]