Are there any health risks to the Alli fat blocker?

Yes. Alli is the over the counter & lower dose version of orlistat, a drug that blocks fat absorption from food. Common minor side effects include:fatty/oily stools, increase defecation, fecal urgency/incontinence...The drug can also cause malabsorption of fat-soluble vitamins, thus a multivitamin is usually recommended to take with orlistat. Major side effects of orlistat include: liver/kidney toxicity.
Probaly not. There have been some concerns of liver injury, but not conclusive, as far as I know. I would not use this medicine long term.