Hydras can regenerate if cut into pieces. But if we take a pound of alive hydras in a blender/grinder and blend/grind them to form a jelly like liquid made of hydras where we have finely blended them, then will this soup turn into millions of hydras or they will die and rot
Based on this article, the answer is probably no. Quote (emphasis mine):
Small tissue pieces were excised from wild-type polyps of Hydra magnipapillata, allowed to regenerate, and the size-dependent characteristics of head regeneration were examined. The excised tissue piece was initially a square flat sheet. This piece gradually rounded up and, within 24 hr after excision, turned into a "spherical shell" which had a continuous ectodermal layer outside, a continuous endodermal layer inside, and an empty cavity at the center.
The smallest spherical shell that could be produced had a diameter of 0.2 mm and contained 270-300 epithelial cells. A tissue piece too small to form a spherical shell always disintegrated, presumably due to lack of an osmotic harrier between the tissue and the environment.
In short: any piece of hydra tissue with a diameter less than 0.2mm or that contains less than 270-300 whole epithelial (skin) cells is incapable of surviving and regenerating. It is highly unlikely that any hydras would survive being blended because the pieces would probably be too small or too damaged to be viable. Of course, if you had a chopping machine that cut hydras into large enough pieces without causing any significant cell damage, you could probably manage to create a large number of hydras in a very short time span. (I'm not sure why you would want to, though.)