Life and death come and go like marionettes dancing on a table. Once their strings are cut, they easily crumble.
What we see now is like a dim image in a mirror. Then we shall see face to face.
1. If a cavalry unit has a disruption marker and is the only unit in a space may it use the retreat to avoid one damage option? My expectation is that retreats under disruption can only be from a morale check but I don't see it explicit anywhere.
For what I understand of the rules, Cavalry may always retreat to avoid a damage cube. That is if there is a Command tile in the are or adjacent area in which the Cavalry will retreat.
The disruption marker will of course follow the Cavalry in the new area.
2. If cavalry retreat from combat voluntarily must they also make a morale check if they took damage? For example, one cavalry is in a space and one attacking infantry does 2 damage. The cavalry takes one damage and retreats to avoid the other. As they took a damage do they need to now make a morale check?
That is a very good question.
I'd say you do a moral check only to see if the Cavalry is eliminated as the unit will already retreat.
I think this is the best interpretation as otherwise these two Cavalries are immortal!