I think that Dumbledore is alive and I have logic to back it up:
Rowling RARELY mentions something for no reason. I believe that the reason that Harry has to brew the draft of living death in the early parts of the book in order to win the Felix Felicis (luck potion) is to establish its existence. Not to mention that Polyjuice potion keeps popping back up. I believe that what really happened is this:
Dumbledore saw Draco as a potential Death Eater recruit what with Lucius being a death eater. So he prepared a polyjuice potion of himself and malfoy. When a weakened Dumbledore told the young Malfoy that he could change the future he may have actually convinced him.
As Snape raced up the stairs with Avada Kadavra on the tip of his tongue, Draco and dumbledore downed their potions and switched their robes. The potion that malfoy downed however was laced with the draft of living death. As Snape uttered the curse, "Dumbledore" fell. But as he was already in a deathlike state, perhaps the curse was ineffective. So it was that "Draco Malfoy" went off to join the death eaters on the heels of Snape. In reality, it's dumbledore as a wonderful infiltrator (hope he has plenty of polyjuice).
We see Draco hesitate, but I believe that that was Dumbledore having trouble leaving the school behind in this hour of need. But he realizes he has no choice and is commited. So he follows snape.
Meanwhile, Draco Malfoy is protected from Voldemort and Lucius Malfoy by the fact that neither one knows that he is actually sleeping away a simulated death in Dumbledore's crypt.
Now some may say that the portrait of Dumbledore appearing is proof of his death. I say that there is no documentation of how enchanted talking moving portraits are made. The fact that McGonnigal is ACTING headmistress only proves further that Dumbledore will be back if he has anything to say about it.