My question is about strong external distraction which happens when we are deeply immersed in meditation of samatha type. 

Culadasa in TMI writes that it is wrong and a sign of mental dullness if sudden strong external distraction startles us (say a dog barks close to you and you are shocked).

On the other hand Joel Morwood in "The Way of Selflessness: A Practical Guide to Enlightenment Based on the Teachings of the World’s Great Mystics" claims precisely the opposite: It is a sign of correct absorption if you are startled by sudden unexpected external stimulus.

Who do you think is right? What is your experience? I am always startled when this happens--I don't move or jerk but mentally it is a "blow".

Thanks for your answers or opinions.

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In the older talks that Culadasa has on SoundCloud (also on youtube I think), he discusses this, I guess in the series about jhanas or the one about joy, and says that it's a sign of dullness. But then I guess in response to a question, he also says that it can happen with deep absoption and it's not always a sign of dullness.

For me, he phrasing "startled" has the connotations of jerking. For you, it doesn't seem to have. So maybe they just use the words differently? I find that when I'm concentrated, a sudden loud noise shatters something, which manifests as mental fireworks, but there is no reaction to it. It doesn't disturb the calm, and it leaves no residue. I only jerk when I'm dull, and when that happens, I can sense a fear reaction and there's a moment of confusion.

Somewhere in TMI (in appendix on Jhanas I think), Culadasa writes that if something startles you while you are in deep jhana (so you "come out" of it), that can be a very unpleasant experience.

So, the answer to your question depends on the type and stage of your practice. In early TMI stages, you are supposed to cultivate extrospective awareness (in order to counter dullness and foster the "power of conciousness" that comes from having strong attention and awareness at the same time). Being startled at these stages is a sign of low extraspective peripheral awareness and dulness. However, in later stages of TMI, introspective awareness is developed at the expense of extrospective awareness, so you can be startled if something from extraspective dimension suddenly intrudes into your experience.

Hm, lately I've noticed that I don't really react much at all to loud sounds. There's a rather busy road right outside my window and even when, say, a car engine backfires or the like while I meditate I don't get those little waves of..something? Adrenalin? washing through my body like I used to. No physical reaction, just a noticing that there was a noise.

There's always a cat at my side at those times and even when they startle at sounds I do not. I've been taking this as a good sign but what do I know.

Right now I can't recall ever hearing a loud sound while deep in jhana (my logs might say something else, though, because memory isn't that reliable). Since I haven't had any other humans around while submerging in deep jhana, I don't know if there were any loud sounds. In the formless realms that one time when they would just unfold on their own over and over again for hours, the world really went away. I don't think any startling would have been possible except for those brief moments of coming out of it before a new cycle of the arc would start. During those seconds, a loud sound might have been shocking. 

In more shallow states of the lower jhanas (I guess it's debatable whether or not that counts as real jhana), I know that I have been interrupted by my cats. I don't recall it as startling. Just frustrating. I recall that I was once interrupted by a phone call, answered it, talked briefly, and then went back into the practice. No startling.  That was probably just a very light version of first jhana that is in itself inherently unstable (I suppose a hard first jhana is something very different from that). 

I have found the passage from TMI I was referring to: ​​​​​​​

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