Using a plugin like Notched: http://ci.kitteh.org/job/Notched/ allows for someone to kill animals in areas where the "protect-animals: true" flag is set.

Using b153 of PreciousStones.

The plugin creates an explosion in the area, have you tried the prevent-explosions flag?

Yes. For example here is my one protection area. Neither protect-animals or prevent-explosions keeps those animals alive when getting hit by an explosive arrow.

- title: Normal Protection
  required-permission: preciousstones.plots.normal
  allowed-worlds:
  - Arcadia
  - UnderVerse
  block: 16
  radius: 7
  prevent-fire: true
  prevent-place: true
  prevent-destroy: true
  prevent-explosions: true
  prevent-unprotectable: true
  prevent-item-frame-take: true
  prevent-flow: true
  protect-animals: true
  protect-crops: true
  price: 100
  welcome-message: true
  farewell-message: true
  visualize-on-rightclick: true
  mixing-group: 1
  cuboid: true
  limits:
  - 2
  - 4
  - 6
  - 8
  - 10
  - 20

mbaxter had modified Notched so it creates a brief TNT block, which explodes on impact instead of creating a explosion event. This has the effect of eliminating explosions inside of the protected fields, while still allowing explosions outside. I will close this off as there isn't much reason to leave this open now.