Is Alternity a dead game? Well, of course WotC isn’t publishing it any more, and you can’t even buy the PDFs because of them being huge ol’ bitches. But between Half Price Books, ebay, and bittorrent, you can get your hands on the materials OK, and there’s still communities out there actively supporting it!
There’s a lot of fan content too – most notably the two major Alternity e-zines, Action Check and Last Resort! Action Check had folks like Neil Spicer work on it, but stopped in 2002; Last Resort last published in 2009, but you can still download all the extant issues of both.
Last Resort E-Zine
And then there’s the massive Resources list at AlternityRPG.net, with metric tons of player contributed goodness!
There used to be an Alternity mailing list but Wizards discontinued it way long ago. If you know of a pocket of Alternity goodness out there, let me know!