I want to add a magicNode to a creature so that it can cast spells. Is there an easy way to do this ... such that I don't need to redo all the animations.

I can't answer the "how" part, but as long as the cast doesn't require the extra node to do anything except follow an existing one, you won't have to change any animations. You can't insert a new bone into a IK chain without affecting animations, but that's not involved here, you just want to attach the new node rigidly to an existing one.

Ok ... I tried extruding a bone from one of the original ones in blender. Although it does move with the animation ... but its rotation is messed up ... its oriented in the same way as one of the other children of the parent bone ...