Don't think it can be done in iMovie. You need to be able to create a tracking matte, or at least a manual garbage matte. so you can apply the blur filter to only that part ( the face )
Maybe there are some plugins that you can buy for it for iMovie.
If you've got iMovie '09, you can potentially use picture-in-picture as a means of obscuring the face. It won't be as nice as a proper face-shaped mask with motion tracking, but it would get the job done, assuming you can vary the position of the PiP over time.
