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I just discovered a method by which a character can cast a spell while afflected with the "dead" condition.

First, go to the downed spaceship in Arnika, and stand in the flames. This will cause your party to constantly take damage.

Second, open the spellbook of a character whose HP is running low.

Third, with the spellbook open, let the character die.

Even though the character has died, you can still have the character cast a spell.

Unfortunately, Resurrection can only be cast if a character is dead when you open the menu. If that criterion is met, however, it is possible for a character to revive herself.

One other random fact: A Valkyrie wearing an Infinity Helm can survive in the flames forever thanks to her cheat death ability, as long as you aren't in a menu that pauses the game.