There's a very good 2D dynamic light & shadow sample here:
http://www.catalinzima.com/?p=323
As for handling collisions, you could use a method similar to the one described in this article:
http://dotnet.sys-con.com/read/589769.htm
where you could have a separate texture that corresponds to your stone and lance texture, but has the lances in one colour and the stone in another colour, and you can check the colour of the pixel that the player touches to determine which part they have hit.