He died during a second ghost dance to remove the 'curse' of being a wendigo from Sam Warner (Twist)'s sister. Another example of taking novels as canon being a nebulous idea at best. Granted they were written before some rules existed, but there you go.
...
... did you
read Find Your Own Truth??
Longshot, Howling Coyote died during combat (astral, possibly metaplanar) with a major spirit -- Spider, though it's a little vague whether it was the totem (who is, after all, a
totem) or a powerful spirit that had taken on lots of aspects of it. He and Verner (Coyote and Dog shamans, respectively) are engaged in close combat in the forms of their totems; Howling Coyote makes a daring but futile attack on the spirit, is mortally wounded, and says something that makes Twist realize that he's more than 'just a dog'. As Verner is the focus of the Ghost Dance, he has immediate access to massive power, if he decides to use it; he decides to do so, changing from a dog to a doglike human, i.e. a shaman with access to the power being channeled through him.
Using it, he smites Spider, and Spider falls. Using it, the Ghost Dance requires from him the sacrifice of his own power, which suggests to me that Howling Coyote never actually acted as the center of a Dance...
So to correct and clarify, Howling Coyote dies in combat, not due to blood magic/sacrifice metamagic.