I used festering mummy to block an 8/8. If I used the counter on the 8/8, would it be a 7/7 with 1 damage right then and there? My friends are telling me the counter applies after combat but festering mummy specifically says "when festering mummy dies" as in at that moment.
Assuming Festering Mummy has died due to combat damage, the creature will indeed be 7/7 with 1 damage marked on it (if you choose that) (C.R. 613.3d). However, you don't put that counter on that creature immediately after Festering Mummy dies, but rather when its ability resolves (C.R. 603.2, 608.2c) (and in the meantime, players have priority to cast instant spells and activate abilities before that ability gets to resolve [C.R. 116.1, 116.4]). Moreover, counters remain on creatures even as steps and phases end (nothing in C.R. 121 suggests that counters are removed automatically as the combat phase ends, for example).
I used festering mummy to block an 8/8. If I used the counter on the 8/8, would it be a 7/7 with 1 damage right then and there? My friends are telling me the counter applies after combat but festering mummy specifically says "when festering mummy dies" as in at that moment.
There seems to be an underlying question there, such as whether something that would deal an additional 6 damage during combat or reduce toughness by 6 or a combination of the two would destroy the 8/8, or whether the 8/8 would deal 7 combat damage instead of 8 (maybe it matters because it has trample). The answer to the latter would be no, because barring first strike and double strike, all combat damage is dealt at the same time. If the 8/8 has trample, it deals its damage to the Mummy and the opponent at the same time the Mummy deals 1 damage to it. Then the Mummy gets destroyed as a state-based action, then its ability goes on the stack, and when it resolves, the -1/-1 counter is placed. It wouldn't be accurate to say that this happens "after combat" since the term "combat" is used to refer to the entire combat phase, but it does happen after combat damage is dealt. In any case, after that, the -1/-1 counter remains on the creature indefinitely, and the one damage stays marked on the creature until end of turn. So 6 damage / -6 toughness applied anytime later in the turn would be sufficient for the creature to be destroyed.
I'm a former judge (lapsed), who keeps up to date on rules and policy. Keep in mind that judges' answers aren't necessarily more valid than those of people who aren't judges; what matters is we can quote the rules to back up our answers. When in doubt, ask for such quotes.
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EDIT (Mar. 25): Correctness edit.