Illuminate a Mirrored Room

Python, 292 chars

import sys
R=''
for x in sys.stdin:R+='%-97s\n'%x[:-1].replace(' ','@')
M={'/':'-98/d','\\':'98/d'}
for d in(-98,-1,1,98,99,97,-97,-99):
 if d>98:M={'|':'d^2','-':'-d^2'}
 p=R.find('C')
 while 1:
  p+=d
  if R[p]in' @':R=R[:p]+' '+R[p+1:]
  elif R[p]in M:d=eval(M[R[p]])
  else:break
print R,

Reads in the room, makes it rectangular, then walks out from the candle in all directions. M contains the active mirror characters and their effect (/\ for the cardinal directions, |- for the others)

Can handle rooms up to 97 characters wide.

c -- 504

Relies on K&R default function calling semantics. Very straight forward implementation except for the fiddle stuff with bouncing the rays.

#define N M[x+y*97]
#define Y abs(y)
#define O M[c]==
#define E else break;
int j[]={-98,-97,-96,-1,1,96,97,98},c,x,y,p,s,M[9409];main(){for(;
(c=getchar())!=-1;){if(c==10)x=0,++y;else{if(c==67)p=x+y*97;if(c==32)
c=64;N=c;++x;}}for(x=0;x<8;++x){y=j[x];c=p;do{c+=y;if(O'@')M[c]=32;s=y/Y;
if(O 92)if(y%2){y=s*(98-Y);}E if(O'/')if(y%2){y=s*-(98-Y);}E if(O'|')
if(~y%2){y=s*(97+(97-Y));}E if(O'-')if(~y%2){y=s*-(97+(97-Y));}E}while
(!(O'+')&&!(O'C'));}for(y=0;x=0,N!=0;++y){for(;N!=0;++x)putchar(N);
putchar(10);}}

Ungolfed

//#include <stdio.h>
int j[]={ -98, -97, -96, /* Increments to move around the array */
           -1,       1,
           96,  97,  98},
  c, x, y, p, s, /* take advantage of static initialization to zero */
  M[9409]; /* treat as 97*97 */

main(){
  /* read the map */
  while((c=getchar())!=-1/*Assume the deffinition of EOF*/){
    /* putchar(c);  */
    if (c=='\n')
      x=0,++y;
    else {
      if (c=='C') p=x+y*97; /* set start position */
      if (c==' ') c='@'; /* The room starts dark */
      M[x+y*97]=c; ++x;
    }
  }
  /* printf("Start position is %d (%d, %d)\n",p,p%97,p/97); */
  /* Now loop through all the direction clearing '@' cells as we
   * encounter them 
   */
  for(x=0;x<8;++x){
    y=j[x];c=p; /* y the increment, c the position */
    /* printf("\tposition %d (%d, %d) '%c'\n",c,c%97,c/97,M[c]); */
    /* printf("\tdirection = %d (%d, %d)\n",y,-(abs(y)-97),(y+98)/97-1); */
    do {
      c+=y;
      /* printf("\t\tposition %d (%d, %d) '%c'\n",c,c%97,c/97,M[c]); */
      /* We ought to do bounds checking here, but we rely on  *
       * the guarantee that the room will be bounded instead. */
      if(M[c]=='@') M[c]=' ';
      /* The reflections are handles
       *   + Stop or not stop based on the even/oddness of the increment
       *   + New direction is a little fiddly, look for yourself
       */
      s=y/abs(y); /* sign of y (need for some reflections) */
      if (M[c]=='\\') if (y%2){ y=s* (98-abs(y));     }else break; 
      if (M[c]=='/')  if (y%2){ y=s*-(98-abs(y));     }else break; 
      if (M[c]=='|')  if (~y%2){y=s* (97+(97-abs(y)));}else break; 
      if (M[c]=='-')  if (~y%2){y=s*-(97+(97-abs(y)));}else break;  
      /* printf("\t\t\tdirection = %d (%d, %d)\n",y,97-abs(y),(y+98)/97-1); */
    } while (!(M[c]=='+')&&!(M[c]=='C'));
    /* printf("\t...hit a %c. Done\n",M[c]); */
  }
  /* print the result */
  for(y=0;x=0,M[x+y*97]!=0;++y){
    for(;M[x+y*97]!=0;++x)
      putchar(M[x+y*97]);
    putchar('\n');
  }
}

Validation

$ gcc -g -o candle candle_golfed.c
$ for f in candle_room*; do (./candle < $f) ; done
+------+
|  C   |
|@   @ +--+
| @\      |
+---------+
+------+
|  C   |
|@   @ +--+
|  /@ @ @ |
+---------+
+------+
| @/   |
|@   @ +--+
|  C      |
+---------+
+------+
|  \@ @|
|@   @ +--+
|  C      |
+---------+
+-----+
| @ @ |
|@   @|
|  C  |
|@   @|
| @ @ |
+-----+