Prior to the Dragonborn's first visit to the crypt, Kyr tells the gatekeeper that no one can go through and he is not to be disturbed. He then enters the crypt with Ra'jirr. The bandits encountering along the way talk about the affair with Ra'jirr's sanity, the Pale Lady, and Kyr's wellbeing.
After entering the crypt, Kyr can be found laid against a rock dying, claiming that Ra'jirr ambushed him and is trying to take back The Pale Blade. He then dies of his wounds and can be looted like any regular corpse.