Oh no, he's not dead, but when I was new, that's what I speculated too.
No one knows why he left, but it is believed that he got too bored with it, and/or he had life to get on with, so handling this game would be too much for him.
My own theory is that he left because of too much peer pressure. Kovu originally wanted to keep this game as realistic as possible. The way the colour system was set up was already a problem to that. But then people were constantly asking him to put in wings, which he didn't want to do, but he gave in to peer pressure and added the wings.
Then people were asking him for hunting which I don't think he wanted to add. But yet again, peer pressure got to him and he said, ok, I'll add it. and that is about the time he left, so he didn't end up implementing the hunting. I think that he left because of to much peer pressure, and he didn't want to add in hunting. So he decided that the game would no longer be changed by taking himself, and the source code, away. That's my own theory.