Not a death, but a PC who's been relegated to NPC status:
Rhaelle, changeling witch 12
System: Pathfinder
Rhaelle and the rest of her party lived in a world with two key things to note:
First of all, the country where most of their adventure took place was ruled by a single high-wizard, and a council of 12, 10 powerful wizards, a magus and a sorcerer. The current council being very elitist about arcane study with the majority, deriding non-wizard/magi arcane casters as lesser beings. One of the wizards on the council was particularly bad, advocating a sort of magical eugenics program to wipe out sorcerous bloodlines (after which he would plan to move on to witches, summoners, and bards) in order to create a world where the only ones with arcane power were the ones who'd studied to earn it.
Second, flight is considered an impossibility for living creatures. The spell doesn't exist on any class' spell list, monsters that normally have magical flight can't use it, and winged creatures do not exist. The concepts of wings, and of hot air travel (such as by balloons or airships) has been theorized, but had never come close to being executed successfully, except for by the land's original high wizard.
Well, Rhaelle (and the rest of the party, including the party's own enchanter wizard) were working against the schemes of Mr. eugenics-wizard while trying to maneuver their way into positions of influence themselves. When the council turned on their own sorcerer however, whom Rhaelle was quite close to, the witch grew fed up with the slow process of gaining influence. She snuck into the home of their villain and attacked him in his sleep, the advantage of surprise giving her enough of an edge to kill the evil wizard in single combat, despite his higher level, but not before his wife saw Rhaelle, fled, and warned the council of her actions.
Rhaelle was branded a criminal on policy, although over half of the remaining council had been somewhat uneasy about their own eugenics-wizard's actions lately. The party was convinced that they could keep Rhaelle in the council's good graces, though it would be difficult.
By the time Rhaelle's best friend, the party's enchanter wizard, had found her though, Rhaelle was set to break the city's border defenses and escape, and she'd done the impossible. Rhaelle had become the second person in the campaign setting to achieve flight, doing so by crafting a broom of flying and exploiting a loophole that allowed objects to fly when people could not.
The enchanter spoke just before Rhaelle was about to take off:
"I hope you're happy!
I hope you're happy now
I hope you're happy how you
Hurt your cause forever
I hope you think you're clever!..."
The two broke into an entirely spontaneous and almost word-for-word rendition of "Defying Gravity" from Wicked (Rhaelle singing the vocals of Elphaba, the enchanter singing the vocals of Glinda, and the rest of us singing the vocals for the citizens of Oz). It was downright amazing, and both Rhaelle's player, and the player of the enchanter were in tears by the end from the sheer amount of emotion they put into the song.
Rhaelle still lives, out in the uncharted wilds west of the city. Meanwhile the enchanter finally managed to make her way into one of the two now-open spots on the council, and she befriended the other new member of the council, a magus, who became Rhaelle's player's new PC. With Rhaelle's departure, the party finally reached one of the goals they'd been striving for for a long time, and a new party ambition: to unseat the current head wizard, has been born.
Long story short: GMing for musically-inclined players is AWESOME.