Here's a curezone link to a fungus cure

1) Can toe nail fungal infections cause other problems with ones body or is it limited to the toe nails ?

It can travel anywhere in your body that is warm and damp.  To you crotch, fingernails, even your hands.  One of the big problems in curing the toenail fungus is that it gets into your shoes, socks, bedding, clothing, carpeting, etc.  You have to kill it in all of those locations or just limit it to socks and shoes.

2) Is the fungus actually IN ones blood ??? Thus can the fungus cause skin problems such as cystic lessions within the skin or is this not possible?

Yes it really is in your blood stream.  Don't know about lesions, but it can travel to other areas of the body.  

I have heard of Lamisil tablets and am aware that they are quite harmful. I dont think I can take them as I am currently taking Isotretinoin which known to be harmful to the liver, so both togeather isnt going to happen.

There is an oral medication for killing the fungus in your blood stream and it can also kill your liver too.  They are supposed to test to see if you are susceptible to that before they prescribe it.

Here's a cuezone link to one person who cured toenail fungus.  You may not like the cure, but it worked.

http://www.curezone.com/forums/fm.asp?i=953326#i