Ok, now that I have some time to give this a real response, here we go:
I'm coming up on 22 years of marriage. In all that time, I don't think my wife has ever once told me what I can or can't do. I can't think of a single ultimatum issued in all those years. If she ever did give me one, maybe way back when we were first married, I probably laughed at her, told her she wasn't going to tell me what I can and can't do, and suggested that she go piss up a rope.
Likewise, I have never told her what to do either.
Marriage is about compromise and communication, not ultimatums and brinksmanship. The issue here to me isn't about cigars-- after all, they're rolled up leaves that we burn for fun-- it's about control. Brother, it sounds like she's trying to control you and unless you're into that sort of thing, you're going to resent it.
You brought up some concerns about health and it sounds like she's having a family crisis that is causing some knee-jerk reactions. That's understandable. Part of your role as a husband is to support her, and help her get past her fears.
I'm going to sidebar here for a second and make a couple of real broad-brush statements that even a few years ago a younger me would be shocked that I said them. I have, however, been observing things for a long time and as well as having been married for a couple decades, I have daughters, so I have seen this first hand not only in my own family, but in just about every other family too:
1) Women want a man who makes them feel safe and calms their fears. Don't believe me? Next time there is a loud noise in the middle of the night see if your wife gets up to check it out or sends you to do it.
2) Women will continually push and push and push to see how much they can get away with. If you don't tell them "No" once in awhile, you will be forever steam rolled. Personally, I blame Disney movies (slight joke) but every girl wants to be a princess. They all act like them sometimes. If you let them, they'll act like it all the time. (This 'princess syndrome' as I call it is easily observable phenomena. Listen to pop music or watch TV shows targeted at women, or even just pick up a woman's magazine sometime)
Back to the point of compromise: My wife doesn't want me smoking in the house. She has valid reasons for that that I can't really make logical arguments against. It's not really a big deal to me as I'm rarely in the house during my free time, so I have compromised 99% of the time on this wish. There are times, however, when I'm in my office and I need to get things done, like right now, that I want a cigar. So sometimes I light up. Actual conversation we had about a week ago:
"I know you sneak cigars down in your office"
"Um... I don't sneak them, I just smoke them."
"You know I don't like it when you smoke in the house."
"I do, and that's why I don't do it very often. Sometimes though, I'm going to have a cigar in there."
...And that was the end of the conversation.
Look, health concerns are real. They're valid. The fact that her father is dying right now is horrible (my sympathy, sincerely) and understandable that she's having a strong reaction. Now may not be the time to have a battle with her. (That's another lesson I've learned, pick the timing of your compromise discussions carefully lest they become actual fights). If having a cigar once in a while--or even more frequently than that-- is something that you want to do, not having that discussion with her at some point when she's ready to listen to reason, is short changing yourself. Doing that is not what healthy marriages are made of. And I'll go back to this again because it's important: It's not about the cigars, it's about control and compromise. Pretty much every unhappy marriage I've ever seen there has been a significant imbalance of power in the home. Some of the best ones I've observed are the ones where people get to live their own lives independent, but still respectful, of their partner.
My two cents. ...And that's about all my opinion is usually worth.
Best of luck to you.
