Well, yeah, Morden never died (except in the eyes of the EA when he "died" on the Icarus). I confess I'm doing my reasoning backwards.
Londo is redeemed by the end of the story, yes? On this we can all agree. The questions are, when and how?
Lady Morella tells Londo that he has three chances to avoid the fire that awaits him. He must save the eye, not kill the one, surrender himself, yadda yadda, we've heard it. The point is, he needs all three chances if he blows the first two. So if he did not kill the one who was already dead, then he was saved right there and then, and he never had to surrender himself to his greatest fear. And I have never yet heard anyone convincingly argue that he didn't do that at some point.
I mean, think about it. We have a story, a character is told that he gets three chances at something, the third chance is extra-special and extra-sacrificial, and he gets it right on try two? It's against all the laws of narrative in Western culture!
So Londo must have botched his second chance... and as he did not kill Sheridan, Morden must have been the one who was already dead. Which leads us to the simple conclusion that JMS goofed somehow, either in telling the story or in telling us about it. I prefer to think that he told the story properly, just as it had to be, and simply misspoke when he was discussing it later.