Is lining up in the neutral zone a dead ball foul?

Answer 1

In high school, yes. In college or pro, the play continues. Defensive offsides is often referred to as a "free play" for the offense because once the offense sees the flag thrown, they know they will have the option of accepting the penalty and replaying the down. Therefore they can make a risky throw into the end zone knowing that there will be no consequence if it is intercepted.