Hm. Well, let's examine the two scenarios separately:
ZUN retires: Dude makes a post on his blog announcing he's out of ideas/going blind/doesn't care anymore/won the lottery, and that he's not making anything past his swan song game, Touhou 14. No music CDs, no manga, no Reitaisai appearances. However, he won't be changing his attitude about doujin works of Touhou material. So thousands of otaku go into a fury of production, banging out manga, music arrangements, Flash videos and games at a higher rate of speed for a while. A couple unofficial "Touhou 15"s are released. And then it tapers off, little by little, until the fandom is a smaller, but more dedicated, nest of otaku - some of whom cling to hope that some day, ZUN will change his mind and start making games again.
ZUN dies: Suddenly - and without warning - he is no more. If he died in a regular ol' way, there'd be a burst of doujin works of great magnitude that would eventually quell into a core of fanatical Touhou zealots. If he died heroically, it would be the same, only on a much larger scale. Posthumous awards may even be involved. But if he died in some shameful, embarrassing, or shocking manner; where his reputation and even his merit as a human being is severely damaged due to the circumstances of his death, then this would likely obliterate most of the fandom in one strike. The few remaining true believers would have to move underground to avoid public scorn and ridicule.