Yeah there really shouldn't be a sequel as far as I'm concerned. It ended the way it should and that's just how it is.
As for Lelouch's status at the end, I can't see it any other way but him being dead. In my opinion, him remaining alive would ruin the theme of the ending. The reason I love Lelouch so much is BECAUSE he took the fall for the sake of world peace, if he pussied out and just survived like in some Shounen story it would really kill my image of the glorious sacrifice he made. Not to mention there's pretty much no way Lelouch could have gotten the Code, or C.C. wouldn't be hanging around by the end.