Well, the elves who died in a battle did return to Arda in a new body, but not to Middle-Earth. To Valinor. But elves can die out of grief, yep.
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"Out of doubt, out of dark to the day's rising I came singing in the sun, sword unsheathing. To hope's end I rode and to heart's breaking: Now for wrath, now for ruin and a red nightfall!"
~Eomer
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