Mark 16:16 states the following words of Jesus, “He that believeth and is baptized shall be saved; he that does not believeth is damned.”
What does the word “damned” mean in this case and how is it compatible with work for the dead? If they did not believe in the gospel when they were alive, then are they already cursed to not receive the blessings Heavenly Father would have given them had they believed?
Though it’s a small point, the text of Mark 16:16 reads, “He that believeth and is baptized shall be saved; but he that believeth not shall be damned.”
In this verse, the Savior summarizes His Gospel to his remaining apostles for them to preach during their missionary work. He’s emphasizing two of the four principles and ordinances of the gospel: faith, repentance, baptism, and the gift of the Holy Ghost.
This verse is easily reconciled with the principle of ordinances for the dead. During their time in the spirit world, those who did not have the opportunity to believe and be baptized will be given that opportunity before the final judgment.
At the final judgment, those who did not have faith and who rejected baptism will be damned at that time.
In the Guide to the Scriptures on LDS.org there is this concise and insightful definition of damnation:
The state of being stopped in one’s progress and denied access to the presence of God and his glory. Damnation exists in varying degrees. All who do not obtain the fulness of celestial exaltation will to some degree be limited in their progress and privileges, and they will be damned to that extent.
Eternal progress can only be reached in the celestial kingdom, so anyone who does not obtain the celestial kingdom (including those who do not believe or are not baptized) will be damned to that extent.
Your second question is more interesting. There are many blessings to following the gospel in this life. People who for whatever reason do not have the gospel do miss out on those blessings. Which is why sharing the gospel to those still living is so important. But missing out on blessings for a time is not the same as being damned which is a permanent condition.