Come to the darkside of SR4 where you can do both those things.

First of all, minor nitpick: SR4 is the first edition of SR to correctly replace usage of the word sentient with sapient. Let's do our best not to backslide. It's not your fault, it's SR1-3's fault.
Second, both sapience and "awakened" critter powers disqualify inhabitation; cool, I agree with you there. But even without breaking any rules there's still the heartbroken mage with the braindead vegetable of a daughter (good-bye sapience) go goes slightly wacko and summons an ally spirit (whose personality is based on his memories of his daughter, of course) into her and mayhem and hilarity ensues.
I think the possibilities here are too intriguing to dismiss the topic so quickly. Even if this is against the letter of the RAW, with a sufficiently contrived situation (like the one above), this just has too much merit as a run idea not to consider.

Change it to try and summon an ally spirit and what actually happens... shedim spirit moving in. Still, lots of hilariy and mayhem.

Definitely. There's also an intro piece of fiction in SM, where a naive mage summons a spirit into his dead wife. Nice piece of writing.

Personally, I keep a close eye on the power level of any spirit, including allies. Half your magic or less in Force, and it's going to be a loyal servant (unless badly treated). From there up to equal your magic, and it's going to be more independent and individual (and who can blame it), treating you more as a friend. If it gets beyond your magic, then face facts, it's going to sit you down and have "the talk."

The relevance of all this? If your ally is inhabiting a tiger shapeshifter, then I'm going to give it a higher-effective force for independence testing purposes. It's just too powerful to consider itself fully subservient.

And on the theme, children ally spirits always learn from their parents summoners. If you've taught it that it's right to destroy someone for the sake of making yourself more powerful... well, that's not an ally spirit you want acquiring any degree of independence from you. Good mages stay friends with their ally after the break-up. Bad mages might just end up inhabited, themselves.

Exactly. In SR4 you can have your ally inhabit anything without any apparent restrictions. Forget Shapeshifter, there are no SR4 Shapeshifter rules yet. Instead, have your ally inhabit a vampire. If you do it right, no only will it have all of the vampire's powers, it will also get all of his skills for free.

The downside is that SR4 allies require their own metamagic.

Also, SR4 allows PCs to learn blood magic, follow the Twisted Path, turn toxic, or follow an insect totem by canon. Force 12 radiation spirit inhabitating the corpse of a hybrid merge fly spirit?

But that wasn't the point of this thread. The point of this thread is how blood magic can become perverted by using spirits rather than living beings. Obviously, it isn't good, but I'm looking for ideas here. What would happen if Mr. Blood Mage sliced the wings off of a giant humanoid fly to power his Slaughter Insects spell that is any different from what would happen if Mr. Blood Mage did the same to a human?

That's not a bad system. I usually do it based on duration - no ally is going to try and go free when you've had it a week, but if you've had it a year and it's learnt a great deal about the world, thinks it can fend for itself, and has no reason to be your servant all the time, then it tries to go free when it can. I am guessing you're counting the mage's unaugmented magic rating (ie, including magic points gained from initiation (including the initiation that granted the ally) but not including magic rating gained from power foci and the ally itself).

Well, it's a little misleading to say that SR4 allows PCs to be blood mages or toxic shamans et al. The rules are there and now streamlined into the same systems as the rest of the rules so you can do it. But it suggests that you don't and that this would normally be only for very dark, very role-playing intensive games. I'm not evangelising SR4, but I do like it a lot and am hopefully correcting one misconception.

Yes, I base it off unaugmented magic attribute as you say. So if some [NPC] mighty initiate with Magic 9 wants to have a Force 6 ally, then he probably can. The same spirit would view a master who achieved that through a Force 3 Power Focus as, well, compensating for something. Not that I could see many magicians being able to divert enough karma to get a Force 6 Ally Spirit, mind you. You are right about the time aspect. I'd give a spirit some settling in time before it suddenly went wild. But I wouldn't make a low force ally try and escape just because it had been serving a long time. Even if it did, remember it needs a Force x 2 vs Magic + Binding opposed test, so it wouldn't achieve it very easily. Ooops - sorry. I just remembered I'm SR4 here and you're SR3? Ignore that last bit, but given all the karma a mage spends on an ally, I don't think it's fair to make it necessarily finite in lifespan. Why would a player ever buy anything more than the absolute lowest levels of ally power, in that case?