I did in fact check a site I frequent to see what Robert's rules of poker say. The site and rules are here http://www.lasvegasvegas.com/poker/chapter4.php

For convience sake I have cut and pasted the Blind use rules from Robert's below. It speaks directly to when two blinds are in play.

SECTION 4 - BUTTON AND BLIND USE

In button games, a non-playing dealer normally does the actual dealing. A round disk called the button is used to indicate which player has the dealer position . The player with the button is last to receive cards on the initial deal and has the right of last action after the first betting round. The button moves clockwise after a deal ends to rotate the advantage of last action. One or more blind bets are usually used to stimulate action and initiate play. Blinds are posted before the players look at their cards. Blinds are part of a player’s bet , unless the structure of a game or the situation requires part or all of a particular blind to be “dead.” Dead chips are not part of a player’s bet . With two blinds, the small blind is posted by the player immediately clockwise from the button, and the big blind is posted by the player two positions clockwise from the button. With more than two blinds, the little blind is normally left of the button (not on it). action is initiated on the first betting round by the first player to the left of the blinds. On all subsequent betting rounds, the action begins with the first active player to the left of the button.

I hope I understood your question and that this answered it in a definitive mannor. Or does it still leave doubt as to what happens in this situation?

Monty