Well it is loud to me. It sounds slightly louder than my injectors. I have owned two other EVO's and never heard a sound this loud.

If this is something bad, What would cause the motor to die all of the sudden during deceleration?

 

I'm not 100% sure, but in my opinion, the lack of lubrication would cause friction and increased load that the ECU isn't programmed to compensate for. That would essentially act like an internal brake that slowed the engine low enough to stall.
The tap of a bad bearing at it's worst sounds like a woodpecker (it's a horrible sound I've been through it in 2 cars). When it's early to about midway through it's death, it sounds like a louder than normal lifter. Don't panic, but take a look. Try putting your ear to the handle of a screwdriver, and touch the tip to the oil pan. This acts like a stethascope. Have someone bring the RPM's up slowly (not high or fast, it will hurt your ear). If it's a bearing in the block (rod, main or balance shaft) it will sound pretty loud this way. Try listening with the tip on the valve cover as well. If it's quieter at the cover then it's very likely a bearing. Also try listening near the bellhousing on the trans. Occasionally a bad throw out bearing can have a tick, but it's usually a whine or screetch. Pinpointing the sound will quickly narrow down the causes.

This is also a good idea. You might also be able to get away with just cleaning the contact with some sandpaper. The design is pretty **** poor and it should utilize a weather resistant harness like every other sensor in the engine bay but that's Mitsubishi genius for you.