what does the * after 2 mean for level of protection in nfpa 70e?
Is the balaclava approved for use in 2*? or Is the hood needed?

Face protection is different.

In Cat 2, you can use either a FR faceshield (with safety glasses underneath) rated at least 8 cal/cm^2, or a flash suit hood rated at least 8 cal/cm^2.

In Cat 2*, you must use a flash suit hood rated at least 8 cal/cm^2, unless you choose to use a FR faceshield (with safety glasses underneath) rated at least 8 cal/cm^2 with a balaclava rated at least 8 cal/cm^2.

I quoted from memory, so if I've made a mistake, somebody else please correct me.

If you calculate an IE of 8 cal/cm² instead of using the task tables, is an 8 cal/cm² face shield with safety glasses adequate or do you need a flash suit hood or baclava?

Hood and baclava. THe difference between HRC 2 and 2* is the assumption of the head position for the specific task. Remmember the tables are task based. You calculation covers all tasks so you need to assume the head my be at your assumed working distance too, like for voltage testing so the safe assumption is to require the extra head protection.

Of course this is just the way I interpret it.

There was another thread on this but I can't seem to find it. Working from memory....

There is nothing in the 70E code that tells you to use 2* if you have calcultated the IE and necessary PPE - only if you use the tables do you see the 2* rating. However, in the 70E Code Handbook (which I don't have) there is an explanation that at 7.9-8, you should wear 2*.

Since the Handbook is an interpretation of the 70E Code, I'm not sure what weight this carries from a 'legal' standpoint. It's also splitting hairs in my opinion. They really need to clarify this in future versions of the code.