He's alternate universe alive. The last scene was in the AU, where, heartened by the fact that he raised a Big Dumb Alien who loves him enough to quote his own platitudes back to him, he goes back to Martha. It's kind of like the end of "Normal Again" on Buffy, where they show crazy-verse Buffy back in her catatonic state after she decides to go back to Sunnydale-verse and save everyone, except for the part where it's an actual AU and not a residual hallucination. :)

--Jessica