What happens to #2 if a formation flight violates a FAR? In a formation, it's generally accepted that the lead pilot is responsible for safety of flight and navigation.  #2 is, colloquially, responsible for not hitting lead.  That is to say, in close formation, you never take your eyes off lead.  In many situations, #2 may not even be in radio communication with lead or monitoring ATC frequencies and his overall situational awareness will be degraded.

If lead, who is responsible for navigation, takes the flight into protected airspace (i.e, flies into Class C airspace without first establishing two-way radio communication) would both pilots be violated, or just lead?

For clarification:

The regulations governing formation flight are pretty sparse.  FAR 91.111, 91.146 and 91.153 are the only mentions of formation flying in the regulations.  There is no requirement for communication during the flight - 91.111 just requires that all pilots agree to operate in formation.  It is not unusual in a formation flight for lead to be on one frequency (talking to approach), and the wing to be monitoring another (or not monitoring at all).  Most communication is done via hand signals.  I do know that ATC treats formation flights differently - they effectively treat it as one aircraft (ATC Manual 2−1−13).  If the flight is cleared to land, both aircraft a cleared to land - #2 does not need to acknowledge.  Hence the question who is responsible if the flight (a single aircraft in the eyes of ATC), violates an FAR?
In the eyes of the FAA, the wingmen are individually responsible if they violate an FAR, even if they are led into it by lead.  

The controlling NTSB decision is:

3 N.T.S.B. 3302, NTSB ORDER NO. EA-1560, 1981 WL 40208
Administrator
v.
MERRELL R. GOSSMAN, EDWARD J. MODES, AND HOWARD MORGAN, JR., RESPONDENTS
Docket No. SE-4591, SE-4592, SE-4593
Adopted February 13, 1981



  As the law judge stressed, each pilot-in-command of an aircraft “is
  directly responsible for, and is the final authority as to, the
  operation of that aircraft” and each pilot has the affirmative duty
  to comply with the minimum altitudes prescribed by section 91.79,
  which contains no exception for aircraft in formation following a
  leader.