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According to the PHB (Page 162) a character can lift up to his maximum load over his head.
Does this mean that a character with a maximum load of 70 lbs who is already wearing full plate (50 lbs) with 20 lbs of items in a backpack can then lift another 70 lb item over their head?
Similarly with stagger. Can the character lifting a 140 lb item and stagger around with it even if they are already encumbered to the maximum limit of a heavy load?
That's actually a really interesting question. Taking a quick look at the relevant section, and just before, it says that for the purpose of simply carrying a load, the character's armor is figured in (which makes sense), but then it makes no reference to what's already being carried when discussing lifting loads. The rules compendium does not clear the matter up, offering no additional information. It's possible that Ed Greenwood offered an opinion on the matter, but, personally, I find the opinions he's offered on rules questions that I've seen to not be worth the time it takes to read them. Others' opinions may vary.
Which means we need to interpret and make a ruling. Logically speaking, a character's worn and carried gear should count against their total amount of weight they can move around. If you can lift fifty pounds, and go on a hike wearing a twenty pound pack, the pack being on your back doesn't mean you're not also supporting that weight when you try to lift a 30 lb boulder. That said, there is a difference between lifting that twenty pound pack with your arms, and having it on your back.
If I were running the game, I would say, generally speaking, yes, a character's worn and carried equipment would count against the amount of weight they're able to lift over their head, off the ground, and push or drag. Generally speaking, it's not going to be important enough to worry about how, precisely, the gear is secured and how that affects its contribution to total load. If however, it was for some reason critically important that a character be able to lift a load of n pounds, and they're already carrying a load and the player brought up distribution of loads and comparative ability to lift a load with your arms vs back, and so on, I would probably say that only 75-90% of their carried load, provided it is properly secured and distributed, counts towards their limits for lifting over head/off ground.
However, that said, such a critically important moment would likely be a very cinematic/dramatic moment, where the PC is making some herculean effort in the moment, to save a life, or open a passage for escape, or the like, in which case, honestly, the rules go on the back burner to allow for a better story. If the player later says "hey, how come I was able to hold up that iron slab in full gear, but I can't carry that much weight normally? I looked it up, that slab would be thousands of pounds." I would simply say "a god favored you in that moment." Which... while I generally hate the "GM is God" school of thought, is not technically wrong, because, well, the gods are npcs and the GM runs the npcs.
