LotR --- Appendix A: III -- Durin's Folk

[Lalwendë]

. . . the reappearance, at long intervals, of the person of one of the Dwarf-fathers, in the lines of their kings - e.g. especially Durin - is not when examined probably one of rebirth, but of the preservation of the body of a former King Durin (say) to which at intervals his spirit would return. But the relations of the Dwarves to the Valar and especially to the Vala Aule are (as it seems) quite different from those of Elves and Men.

This is interesting, as it seems to suggest some kind of resurrection. I feel that Tolkien would not have intended such a thing for one of his races so I wonder...could it have been simply that 'Durin' was simply in some kind of suspension, an incredibly deep sleep?

And indeed, this makes it even more complicated as to what happens to all Dwarves after death. Their burial customs seem very concerned with eradicating the possibility that no creature should eat the deceased, and when they have no chance to dig a huge amount of stone tombs, they instead turn to cremation. In addition, the actions of Azog drive them to particular rage about the body being defiled after death. It may be more than just disrespect that they are angry about; they may see the preservation of the body as important in their afterlife.