The ignore list dialog has a checkbox for "show only buddies" if you search for a membername.   

I'm seeing the same thing HoopZ is... tried to ignore someone, can still see their posts, in the default blue/white theme.
EDIT:  I was wrong.  I was using the Classic YabbSE theme.  Changed to the default and ignore works.  I see the 
posts but the 
content is blocked.  There is a "user is ignored" message instead.   

EDIT2:  Confirmed... works in the SMF Default theme but not the Board Default.