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Is it possible for a modern Buddhist to believe in what sounds like fantasy or magical powers (Rddhi) ?
If there is a belief in these things, then there exists conceptual artefacts. I certainly don't believe in them. In Buddhism, if they occur for you, - and they can occur in some quite powerful ways - they can be seen to have only an indicative value, both for personal practice and in how you skilfully integrate with others. Personally, I was plagued by these things, but given the correct attention, they served my practice well.
Do any current day Buddhists practice these?
Off the top of my head, Daniel Ingram is quite vocal about the siddhis. Whilst he is certainly an interesting character, I would find it difficult to recommend many of his practice methods to others for many reasons. For one, he teaches Buddhist practices that are far too powerful and disproportionately off-centre from the eightfold path for the average run-of-the-mill person, and some of those practices can't even be considered Buddhist in nature.
Are the eight classical Siddhis or Rddhi now rejected or reinterpreted ?
They are neither rejected nor reinterpreted. The approach to the siddhis from the suttas tells us two things: 1) to much wrong attention towards the siddhis is not helpful towards the primary task at hand: the ending of suffering. 2) the siddhis are only symptomatic of the primary task at hand. In other words, they are a sign that the radiant mind is opening further.
Then Venerable Anuruddha went up to Venerable Sāriputta, and exchanged greetings with him. When the greetings and polite conversation were over, he sat down to one side and said to him:
“Here’s the thing, Reverend Sāriputta. With clairvoyance that is purified and surpasses the human, I survey the entire galaxy. My energy is roused up and unflagging, my mindfulness is established and lucid, my body is tranquil and undisturbed, and my mind is immersed in samādhi. But my mind is not freed from the defilements by not grasping.”
“Well, Reverend Anuruddha, when you say: ‘With clairvoyance that is purified and surpasses the human, I survey the entire galaxy,’ that’s your conceit. And when you say: ‘My energy is roused up and unflagging, my mindfulness is established and lucid, my body is tranquil and undisturbed, and my mind is immersed in samādhi,’ that’s your restlessness. And when you say: ‘But my mind is not freed from the defilements by not grasping,’ that’s your remorse. It would be good to give up these three things. Instead of focusing on them, apply your mind to the deathless.”
After some time Anuruddha gave up these three things. Instead of focusing on them, he applied his mind to the deathless. Then Anuruddha, living alone, withdrawn, diligent, keen, and resolute, soon realized the supreme culmination of the spiritual path in this very life. He lived having achieved with his own insight the goal for which gentlemen rightly go forth from the lay life to homelessness.
He understood: “Rebirth is ended; the spiritual journey has been completed; what had to be done has been done; there is no return to any state of existence.” And Venerable Anuruddha became one of the perfected.
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Allow me to point out that the category 'Modern Buddhist' covers 535 million people across hundreds of nations and thousands of cultural groups, ranging from parochial tribal villagers with no formal education to cosmopolitan urbanites with doctoral degrees. I have no doubt that if we went looking we could find a decent number of them who believe in and practice this assortment of paranormal powers.
I mean, heck: I can go into any major city in the US and find a New Age bookstore with people practicing crystal healing, astral-plane travel, angel card divination, and an assortment of other 'magicalish' powers. Why should I doubt that there are Buddhists somewhere trying to levitate themselves?
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There are many groups of people who self-identify as Buddhist.
Some are orthodox dogmatic Buddhists who take the scriptures literally. So, if the scripture talks about supernatural powers then they will accept it literally. Usually they are not interested to obtain these powers, but they will talk about them in a positive way and will colorfully recount how the Buddha and his senior disciple Moggallana used them.
Then there are the New Age people, who may not understand what the Buddha taught but would mix Buddhism with New Age ideas. They may even have Buddha statues, Bodhisattva statues etc. and might practise some kind of mindfulness meditation with scented candles and meditation music. They would accept these supernatural powers as true and may be interested to obtain these powers, but usually it's out of their reach.
Next we have Vajrayana practitioners among whom, some may practise tantra. The tantra practitioners may be interested in supernatural powers.
And then we have Secular Buddhists who discard anything they feel is pseudoscience, and only extract teachings of Buddhism which they see as useful. These people would not believe in those supernatural powers. They may view Buddhist teachings as psychology.
Finally, there are very serious practitioners of Buddhism, the ariya (noble), those seeking the end of suffering. These practitioners are not seeking supernatural powers as they are not important to the ending of suffering. So, whether these supernatural powers are true or not, or attainable or not, is unimportant to them. The Buddha's senior disciple Sariputta, the arahant, did not have any supernatural powers.