What I find most disturbing about the Arizona bill and the Blunt amendment is that they seem to mark the opening of a new front in the war for theocracy.
Our government once recognized that religious beliefs do not trump legal obligations. Hence, for example, when children would die because their parents refused them necessary medical treatment out of religious scruple, the parents appropriately got prosecuted for manslaughter.
Assuming for the sake of argument that it is all right to exempt churches from certain legal obligations which conflict with their core teachings (they already get out of paying taxes, though I'm not sure what religious teachings are offended by taxes), the exemption should be strictly limited to situations in which the church is doing exclusively church things (e.g., preaching, terrifying kids with tales of eternal damnation, fleecing the faithful, etc.). I can imagine no justification for extending the exception to secular activities conducted by churches or, more likely, by juridical institutions they may own (e.g., colleges and hospitals). Even less justifiable would be bringing within the exemption's ambit secular actors engaged in entirely secular economic activities (e.g., manufacturing porto-potties and trading in reverse credit default swap derivatives).
I am not a Christian, and have only the loosest acquaintance with scripture, but didn't Jesus say something about rendering to Caesar what is Caesar's? Perhaps that part of the message was optional.