I think he is quite dead, because for one he had the dark shade under his eyes. That effect is never used for simple exhaustion or sleep. Its either he is seriously ill, or that he is dead. With the way the conversation went during that scene, as well as all the symbolism with the bird and all, he is probably gone.

I definitely agree with anime usually rushing things, but I feel this show doesnt really waste a lot of time. I think most of the episodes, though lacking action, have done a great deal moving the story forward, as well as fleshing out both the characters and the world (which is incredibly interesting).