I took the [Diplomacy] route with him and ended up in a fight before heading down to level 13.

 

He's not dead; he's in the dungeons of Caed Nua, however the dialog with Tcharek assumes that he no longer breathes...and gives me two different versions of events to choose from.

 

Hey Achilles,

 

Those dialogue options seem okay to me. You still had to defend yourself regardless of Kestoric end state. No where the dialogue mentions Kestoric being dead.