Is it permissible to count the amount paid as blood money (Diyya) from Zakat funds, and can it be considered Zakat for two years, or part of it as Zakat and the rest as Sadaqa?

If blood money (Diyya) is obligatory for a killer who is in straitened circumstances and cannot pay it, it is permissible to give him Zakat. The intention for Zakat is a prerequisite before disbursing it. So, if you did not intend it as Zakat when you paid the money, it is not valid to count it as such, and you are still obligated to pay Zakat. However, if you intended to expedite the Zakat at the time of paying the money, that is valid and considered expedited Zakat, and expediting Zakat is permissible.