Are players who are turned into monsters by the traitor affected negatively by the house?
Short answer: Either interpretation is valid.

I remember playing this same scenario, but don't remember that question coming up at all. I reread through both the hero and traitor books for this scenario, and this seems to be a gap between the literal as-written rules and the general intent/theme of the game.

As written, a blob-person still would count as a hero and a regular character, and would be affected by the house and other things that affect all players. They would still have their normal stats except for their speed which is changed. This is based on the fact that the rules specify what is different about blob people, and those changes do not include giving them traitor or monster status:


  A Blobperson can't attack, be attacked, draw cards, use the Mystic Elevator, or discover rooms.


That being said, given that the rules are known to be full of holes, it's reasonable to believe that the blob people are intended to be treated as monsters, except that they are controlled by each player, instead of by the traitor. This is based on the fact that their stat is listed in the rules the same way all monsters' stats are, and the fact that their goal is to help the traitor win, exactly like the goal of the traitor and other monsters.