Does a quiet or loud environment affect listen checks?

Question

A invisible caster with no move silent skill is a dc 10 to hear.

2 guards whispering at 100ft distance is normally a dc 35 to understand.

However, can the sound of battle increase this DC? Does the sound of crowded market increase this DC?

I know there is a +5 for listener distracted, but when is this taken into account? Do you get this -5 each time you hear something in a reactive manner, do you get a -5 for every action you do in your turn (for example, balance check + full round attack + attack of opportunity = 3x distracted = -15)?

Answer 1

By RAW, sort of

The Listen skill itself contains no penalty relating to loud noises being near you, though you might be able to argue that it counts as "Listener distracted" and I'd certainly rule it that way. However, the Dungeon Master's Guide does contain a small sidebar talking about an often under-used system - Circumstance Bonuses/Penalties. Essentially, at the DMs discretion you might enjoy a +2 Circumstance bonus, or a -2 Circumstance penalty (or +1/-1 for that matter, 2 is just the cap) on any given roll based on the local environment. Especially loud noises might invoke the penalty, where an especially quiet environment probably grants the bonus. This is explicitly, however, the purview of the DM.

Answer 2

The rules are pretty vague here and almost all of the cases you mention are left up to the DM by way of applying Circumstance bonuses and penalties, or be deciding what exactly counts as “distracted.”

The one thing I can say definitively is you are either distracted or you are not. Being distracted adds 5 to the DC (which is mathematically the same as a −5 penalty but you don’t actually take a penalty), which does not stack for being “more distracted.”