JOEL - By the time Jesus finally arrived on the scene Lazarus was definately dead, as evidence by the words of Martha who said:

"Lord, by this time he stinketh: for he hath been dead four days." (John 11:39)

and according to Jewish tradition the spirit no longer remains near the body after four days having gone on to the next life, thus lessening the chance of being brought back to life.

The scriptures describe how Jesus waited a couple of days before coming:
"When he had heard therefore that he(Lazarus) was sick, he abode two days still in the same place where he was." (John 11:6)

It was almost as if Christ purposely waited for the four days before doing something, to demonstrate to the Jews His power over life and death.
If Lazarus was really dead, the only place his spirit could be is in the Spirit World (Paradise). Bruce R. McConkie put it this way:

"A reverent curtain of silence drops over the sayings and doings of Lazarus - from his youth to the day he fell asleep in the arms of death; during the four days his spirit visited with friends in paradise, as he awaited the call to come back to the turmoils of life; and from the time he again breathed the breath of life until he laid down again his mortal tabernacle, this time to await that glorious day of resurrection of which Martha spoke. Lazarus lived and Lazarus died and Lazarus rose again - that he might continue his mortal probation; that he might die again; that he might be, for his day and for all days, a living witness of the power of him who ministered in Bethany as the Son of God." (Mortal Messiah, McConkie, vol. 3 p.280)