Here's what the National Institute on Drug Abuse has to say about marijuana:
http://www.nida.nih.gov/infofacts/marijuana.html
Looks like there's still no positive evidence that smoking pot leads to lung cancer, and the effects on the brain and heart appear to be only acute so far. I've never read anything linking pot to liver damage, and I think it would be difficult to prove...not saying it didn't happen in your neighbor's case, AGDee, I've just never heard or read that before.