As far as avoiding damage, just don't walk too close while attacking. As far as obtaining the drips without altering the trap, assuming you are already using water, continue the water stream in a set stream 1 block high so zombies can't fit in it
And just FYI, when you die you drop XP orbs which can be picked back up. Not usually all of them, but it's not usually a total loss.
As for the spawner, I haven't tried making one on SMP recently. In the past the hitbox would not allow you to attack feet on SMP, however- dunno if that's changed or not. What I've seen used is iron bars, attacking from above. It has the advantage of being useful for cave spiders, who can fit through a half-slab opening, but will work on other mobs as well.
I dug out one whole wall of the dungeon and put a line of pistons where it once was, so that there was only one space between the ceiling and the extended pistons. Four blocks away along a 5 wide, 2 high cobblestone tunnel, I do the same thing. I hook both of these lines up to a switch so that when one is extended, the other is retracted.
So, while (Set 1) is down and (Set 2) is up, zombies come marching along, and I smack them around from just out of reach. When they stop spawning for a moment or two, I hit the switch, walk into the killing area, pick up the meat and any XP orbs that didn't get to me. Go back, hit the switch, and slice it up some more.
If I remember, I'll come back and post some pics or a vid.