It is always a tricky thing, in SL. Sometimes some people start such rumors. Sometimes, a person wishes to move on with their lives without SL, and start this rumor themselves. Though, sadly, often enough, these things are simply true. We are all too mortal, even if our avi's are not. I am inclined to assume it true.
It would be sad. Have never met her in SL, that I can remember, but I have seen her posts here a long time ago, often quite intelligent, and I think I remember one of her stories, which was quite good as I recall.