I know that questions like this have been asked many times, but I have not found one exactly like this yes. I have implemented a top-down grid based world in Monogame, and am starting on the lighting system soon. How I want to do lighting is to have a grid that is 4 times wider and higher, basically splitting each world tile into a 4x4 system of "subtiles". I would like to use a flow like system to spread light across the tiles by reducing the light by a small amount each time. This is kind of the effect I was going for:

http://i.imgur.com/rv8LCxZ.png

The black grid lines are the light grid, and the red lines are the actual tile grid, and the light drop-off is very exaggerated. I plan to render the world by drawing the unlit grid to a separate RenderTarget2D, then rendering the lighting grid to a separate target and overlaying the two.

Basically, my questions are:

1. What would be the algorithm for a flow style lighting system like this?
2. Would there be a more efficient way of rendering this?
3. How would I handle the darkening of the light with colors, reducing the RGB values in each grid, or reducing the alpha in each grid, assuming that I render the light map over the grid using blending?
4. Even assuming the former are possible, what BlendState would I use for that?