Is classical music dead, dying or in reasonably good health?
"Classical" music is certainly not dying, as critics moaned in the 1980s and 1990s; there is a resurgence of contemporary music programming by orchestral and chamber ensembles, and a younger generation of composers enabled by the vastness of the tradition and new aesthetic possibilities, is successfully moving classical music toward mainstream audiences again. Performers are crucial to this movement, and fortunately they’ve realized that Mozart at one point was "new music" and only found respect and widespread programming because it was played in the first place!
Since you referred to classical music with a lower case "c" I will assume you are talking about a broader range of music than just the 1750 – 1820 time period. As a classical composer I feel that classical music is still thriving and has a bright future. Even if funding for the arts is limited composers will continue to write music regardless of the economic climate or audience turnout. As long as new music is being written and performed it is not a dying art.
Composers will write music because they have an inner pull to create new music and musicians will continue to play new works because they have a need to perform and interpret. As long as you have composera and performers you will have a thriving classical community. We may go through times when the pay for our art is nominal, but artists involved in this artform will continue to create and perform.
I feel that now is a very good time to be a composer as new opportunities exist which have never before been possible. There are more orchestras in existence now than there have been previously in history. The big problem is that modern composers have to compete for performance time with every other composer that has previously lived. This is a 20th and 21st century problem, and one that is causing orchestras quite a bit of "performance anxiety."