He never said dead, he said she ran off into the "dead zone" I believe. Which they figured she's as good as dead. The Gov is blaming Merle so he can have a scapegoat for the whole situation, having Daryl is perfect for that.
I hope Daryl get snout alright, I could care less about Merle. There's too much bad blood between him and Glenn now for him to join with Rick and them if they somehow get out of the town alive. Its pretty much building up to a war now.
And damn the Gov needs to get knocked off, Andrea would be great to do that.
Edit:
I just realized this. As soon as a new black person joins the group the old one gets knocked off lol. There can be only one token black.