friend said:
First, there is one particle propagating through space. The Feynman diagrams would have one input state and one output state, and there is a myriad of virtual particles exhibited in the calculation of it propagation.
Ok so far.
friend said:
The second is that we then have two such single particles propagating though space. If the two particles are far apart, then we only consider the virtual particles associated for the propagation of first particle to be independent of the virtual particles associated for the second particle.
Not really, but it's not worth delving into this since you're really interested in the case where there is interaction; see below.
friend said:
if the two propagating particles are brought close, then can the virtual particle associated with the propagation of the first particle actually be used in the propagation of the second?
You're confusing yourself by mixing up Feynman diagrams. Unfortunately I don't have a handy way to draw such diagrams here, but these are simple enough that they can be described reasonably well in words.
So we have an "in" state consisting of two electrons (remember we're talking QED here), and an "out" state consisting of two electrons. The simplest diagram for this case is just two straight electron lines, with nothing else present. (Note that there are actually two cases of this diagram, one with the lines just going straight up and one with them swapping places; but we won't go into that here.) Note that there are no vertexes in this diagram, just lines, and the lines are all external lines, so there are no virtual particles at all in this diagram.
The next simplest diagrams are those with two vertexes. (Btw, you might want to ask yourself why there are no diagrams with a single vertex for this case. Think about what a single vertex would correspond to.) There are three diagrams with two vertexes:
(1) Both vertexes are on electron line number 1. This corresponds to electron number 1 emitting a virtual photon and then absorbing the same virtual photon later on.
(2) Both vertexes are on electron line number 2. This corresponds to electron number 2 emitting and then absorbing a photon.
(3) One vertex is on each electron line. This corresponds to electrons 1 and 2 "exchanging" a photon. (The word "exchanging" is used because, as you will see if you think about it, there is no way to specify once and for all which one is "emitting" and which one is "absorbing" the photon, since the vertex on each line could be anywhere.)
Now: try to reformulate your question in terms of the above diagrams. Can you do it? I think you will find that you can't: that the question you were trying to ask can't even be asked in terms of the above diagrams. Which means the question isn't really well-defined.