We believe that death is the result of sin, that death is not a part of God’s original design for mankind: “For I have no pleasure in the death of anyone, says the Lord God; so turn and live” (Ezek 18:32). Death was not “created” by God, who is the Source and Author of all life and Who, by revealing His Name as “I AM” to Moses reveals that He is Existence Itself: “God did not make death, and takes no pleasure in the destruction of any living thing; He created all things that they might have being” (Wis 1:13). Death is a consequence of the first sin, a consequence which touches all humanity. Jesus Christ came into the world to conquer death, to point the way to new and eternal life, to offer a refuge from corruption and all that corrupts God’s “good” creation. This was accomplished through the death and resurrection of Jesus Christ, who “has been raised from the dead, the first fruits of those who have fallen asleep. For as by a man came death, by a man has come also the resurrection of the dead. For as in Adam all die, so also in Christ shall all be made alive. But each in his own order: Christ the first fruits, then at His coming those who belong to Christ. Then comes the end, when He delivers the kingdom to God the Father after destroying every rule and every authority and power. For He must reign until He has put all His enemies under His feet. The last enemy to be destroyed is death (1 Cor 15:20-26). Finally, our hope as Christians is to share in Christ’s victory over death: “I am the resurrection and the life; he who believes in me, though he die, yet shall he live, and whoever lives and believes in me shall never die” (Jn 11:25-26).
Death, for Orthodox Christians, is always a tragedy, something which distorts the goodness and beauty of God’s creation. By His own example at the tomb of His friend Lazarus we see that death is always tragic, even for the One Who conquers death. Christ came to proclaim new life, to acknowledge that death is not a transition into eternal oblivion, to announce that “through [Him] God will bring with Him those who have fallen asleep” (1 Thess 4:14). We also believe that “if we have been united with HIm in a death like His, we shall certainly be united with Him in a resurrection like His. ...If we have died with Christ, we believe that we shall also live with Him” (Rom 6:5,8). Concerning prayers for the dead, your question, which is more of a statement, seems to be directed at those who teach that after death humans may encounter “purgatory,” an intermediate state in which the “punishment” accorded to sin must be “purged” before one can enter the eternal Kingdom of God. This teaching, found among the Roman Catholics but completely alien to Orthodox Christianity [which rejects the doctrine of purgatory], implies that one should pray for the release of the souls of the departed from such punishment and may imply that the departed, of their own will, can freely repent of the sins they committed during this lifetime.
Orthodox Christians pray for the dead so that the Lord will have mercy on their souls, that He will grant them eternal rest “in the bosom of Abraham, Isaac, and Jacob,” that He will extend His unfathomable love upon them, and that He will receive them into that state “in which there is neither sickness, nor sighing, nor sorrow, but life everlasting.” Saint Paul clearly teaches that those who have gone before us are still members of the Body of Christ, the Church. And it is the duty of the members of the Church to pray for one another. Just as the living continually beseech God to have mercy on them—and may rightly offer prayers to God on behalf of their living spiritual sisters and brothers as well as request prayers on their own behalf from others—so too we have the duty to pray for all members of the Body of Christ, even those who have departed this life and still “belong to Christ.” One will find that the early Christians, surrounded as they were by death as a result of official persecution on the part of the Roman Empire, took great care to honor the dead, to bury them with great care and reverence—to the point of offering the Eucharistic celebration on their graves, which is one of the earliest indications of the veneration of their relics!—and to remember them especially on the anniversary of their deaths which were seen as “birthdays” into eternal life. In asking God to have mercy on the souls of the departed, we also ask God to have mercy on us who are still in this life, and we recognize that we too shall die. All members of the Church, living as well as faithful departed, cry before the throne of God, “Lord, have mercy on us.”
I might add here that the standard Reformed reactions to prayers for the dead are reactions to certain teachings in Roman Catholicism. The arguments against these teachings and practices should not, in blanket fashion, be used against Orthodox Christianity which rejects some of the very same teachings and practices, such as the recent reintroduction of “indulgences” by Pope John Paul II. Orthodoxy is not a form of Roman Catholicism and it should not be assumed that the teachings of the Orthodox Church are one and the same as those of Roman Catholicism.
It should also not be assumed that, just because the Orthodox may have a similar ritual to another Christian body, it has the same meaning. One must look beyond externals, as Christ continually challenged the pharisees, and evaluate things on the spirit which drives those externals.