The easiest thing to do is duplicate the background frame and cut-out that section, and place this second copy on top of the hero sprite at the same coordinates as the full background sprite.
Edit: or, with blending, the trick is you need the hero and mask on another layer with "Force own texture" turned on. My sample with "Destination out" then does what you want.
http://www.blackhornettechnologies.com/ ... utout.capx