What your talking about is the debate about degree of relationship....

http://en.wikipedia.org/wiki/Degree_of_relationship

in the world of fantasy, there are no rules. not my cuppa', but whatever floats the ol' man in the boat.

Fantasies are just that
And I think in some places 2cd cousins can marry or maybe that's 3rd cousins

There are many states where 2nd cousins can marry.
I've read about the hazards and statisitically there's no more risk than for two unrelated persons. However all the cautions against pregnancy apply.

According to the law 2nd cousins in many states are find and many scientific studies show that there is not more risk of birth defect then there would be with an unrelated couple. so yea.

http://www.cousincouples.com/?page=facts

( not sure how valid that site is I didn't really check it)

fantasies are harmless.

Having feelings, and acting on them are two different things. My older brother has, in our adulthood, done a couple of things in front of me that seemed to me flagrantly suggestive. But he may not have even been aware of it. What I do know is that when we were younger, he molested me. And I brought it up once in a heart-to-heart with him, and he said he didn't remember it. (but if he did, he was sorry)

We don't see each other often so I just ignored it and stay away from him. If I asked him about those two incidences though,

I think sibling/parent/child sexual relationships are not only illegal, but morrally corrupt. Most people, even non-God-oriented ones, would agree that is going past the line. However, even first-cousin relationships are not legal but again, most people still raise an eyebrow about it. In that case though, I think the social-correctedness lies in the eyes of the beholder. That does not mean everyone else needs to or should agree with it, however.

Aw, crap.... lost a part in mid-sentence....

....If I asked him about those two incidences though, I am 99.999% sure he would deny it, whether he was aware of it or not.