Can I use my dehydrator to raise bread? I bought a dehydrator about a year ago and the product manual says that a dehydrator is great for leavening bread. I have tried this a number of times with (seemingly) good results, but I am unsure if the dehydrator is having an adverse affect on the final product.

I have the 9 Tray Excalibur, and I usually place a bowl of warm water at the bottom, then place a large mixing bowl with a dish cloth over the top on the third tray (just above the bowl of water). I'll turn the dehydrator to 95°F (35°C), and let the dough rise according to the recipe.

When dehydrating fruit/vegetables or making trail mixes, etc., the dehydration time is usually measured in days rather than hours.  From that perspective, I don't think that my breads should be significantly dehydrated during the rising process, but I don't know for sure.

Also, the Excalibur works by 'fanning' the moist air away from the trays inside.  The fan is not forceful, and is not powerful enough to shift a damp dish towel, but it will easily lift a piece of paper towel or similar. As I typically use a damp towel to cover the bowl, I don't think air flow is an issue either.

Are my assumptions correct that this is a safe thing to do, or am I setting myself up for failure and dooming some would-be delicious breads?
Sounds like it's working for you. As long as the dough doesn't form a skin, inhibiting rising, then looks like it ain't drying out.

Very even heating too, I imagine; that's critical: with the hot and cold patches of some big ovens, uneven fermentation and rising could ruin a loaf especially the final proofing. Cracks in the sides of the crust can be blamed on this.