Yes, I'd think if you are seeing down and skin sticking to the shell, as well as smelling a bad stench, it is probably a sign of death at hatching. This would normally indicate that the membrane of the egg dried out while the bird was pipping the egg. Sometimes this is the result of a dry membrane (ie. not enough humidity, which can be a problem if you don't offer your birds a bath pan) or a result of a weak squab who could not complete the hatching process and became exhausted, resulting in the shell membrane drying out. If you look thoroughly around the nest, you will probably find the squab and the rest of the shell. Quite often, they begin to decompose very quickly and dry up in such a way that they are hidden somewhere in the nest. Obviously, if you have rats or other rodents, they will scavenge any dead squab or egg remnants the parents kick out of the nest.
On your second question, do you mean: "Can you breed the youngsters of the first clutch together with youngsters of the second clutch?", as in, breed them full brother and full sister?
While you would not want to do this too often, yes it can be done. It is the closest form of inbreeding and is sometimes used to "fix" the traits of the parent pair into a bloodline of birds. You will want to keep in mind that it will intensify not only the good characteristics of your old pair in another generation, but also their weaknesses. Breeding this close too many generations in a row can often lead to a whole loft full of genetic weaklings or a loft full of birds with low fertility.
Whatever is in the birds you start with, you are going to perpetuate.
On your second question, do you mean: "Can you breed the youngsters of the first clutch together with youngsters of the second clutch?", as in, breed them full brother and full sister?
While you would not want to do this too often, yes it can be done. It is the closest form of inbreeding and is sometimes used to "fix" the traits of the parent pair into a bloodline of birds. You will want to keep in mind that it will intensify not only the good characteristics of your old pair in another generation, but also their weaknesses. Breeding this close too many generations in a row can often lead to a whole loft full of genetic weaklings or a loft full of birds with low fertility.
Whatever is in the birds you start with, you are going to perpetuate.