1) Item drops for dead characters? 2) Items becoming un-reserved?

Regarding item drops, what happens with item distribution if members of a party are dead? Are the drops still reserved for dead players and henchmen, or are the chances only split among living players and henchmen?

I've also noticed that, while backtracking through a zone, items that were previously reserved for a player have become "fair game", so to speak, insomuch that anyone can pick them up. How long does it take for that to happen? Does that occur in both missions and quests?

m19

1. Dead players get a chance for drop if they are near the area the mob was killed. My party was killed near me and I finished the last monster off who dropped an item for a dead player.

2. Both missions and quests (but never waited for a quest item drop to timeout). And the time it takes "seems" to be less than 5 minutes.