They left that point up in the air - he could be dead, but Loki could also have sent him into Odinsleep somehow (Odin already looked rather weak and tired in the film) or locked him in prison, maybe using some spell to glamour him/hide his true identity.
I think the King's destiny may depend on whether Anthony Hopkins is willing to return for the third movie or not.
What I'm curious about is where is Heimdall - shouldn't he be able to see through Loki's rouse? The gatekeeper confessed his treachery in helping Thor, Jane and Loki escape to the real Odin, so Odin!Loki would have had an excuse to send him away or imprison him to avoid his all-seeing powers, but Volstagg and Sif committed the same crime and yet Odin!Loki is still using their services, as we see in the post-credit scene with The Collector.
Anyway. I'm hoping they announce the exact release date for Thor 3 at Comic Con.
