Sandor's fate has not yet been confirmed.

Spoilers from A Feast for Crows!

However, there is a pretty solid theory going around that Sandor is alive and is a novice (gravedigger) at the monastery on the Queit Isle. The evidence supporting this theory is as follows:

• The Elder Brother of the monastery told Brienne that he knows an awful lot about the mind and soul on Sandor. Maybe too much for he only spoke to him briefly before the Hound apparently died.

• The gravedigger is very large, bigger than Brienne.

• The gravedigger has an injury similar to the one inflicted upon Sandor.

• Brienne notices the gravedigger bend down to pet a dog. Believed to be a hint from GRRM.

• The Elder Brother is very vague on the subject of Sandor's death. It is possible that he is speaking metaphorically by saying that the violent and angry Hound is no more, but Sandor still lives. This is backed up by the Brother himself as he said that he 'died' on the Trident when he was a warrior. His 'death' was a major life change, which could be the same for Sandor.

• Sandor's horse Stranger was also present on the Quiet Isle, this supports the theory as it was said that only Sandor can lead or ride Stranger as the horse is exceptionally difficult to handle.

• Before Arya left Sandor, she asked if he would die. His response was that he would unless there was a maester nearby. The Elder Brother is well known for his potent powers as a healer, I think this was another hint pointing towards Sandor being treated for his wounds and still lives.

However, there is one quote by the Elder Brother that could go against this theory:

"I buried him myself. I can tell you where his grave lies, if you wish. I covered him with stones to keep the carrion eaters from digging up his flesh, and set his helm atop the cairn to mark his final resting place."

Source

I personally do not believe we have seen the last of Sandor.

Sandor's fate has not yet been confirmed.

Spoilers from A Feast for Crows!

However, there is a pretty solid theory going around that Sandor is alive and is a novice (gravedigger) at the monastery on the Quiet Isle. The evidence supporting this theory is as follows:

• The Elder Brother of the monastery told Brienne that he knows an awful lot about the mind and soul on Sandor. Maybe too much for he only spoke to him briefly before the Hound apparently died.

• The gravedigger is very large, bigger than Brienne.

• The gravedigger has an injury similar to the one inflicted upon Sandor.

• Brienne notices the gravedigger bend down to pet a dog. Believed to be a hint from GRRM.

• The Elder Brother is very vague on the subject of Sandor's death. It is possible that he is speaking metaphorically by saying that the violent and angry Hound is no more, but Sandor still lives. This is backed up by the Brother himself as he said that he 'died' on the Trident when he was a warrior. His 'death' was a major life change, which could be the same for Sandor.

• Sandor's horse Stranger was also present on the Quiet Isle, this supports the theory as it was said that only Sandor can lead or ride Stranger as the horse is exceptionally difficult to handle.

• Before Arya left Sandor, she asked if he would die. His response was that he would unless there was a maester nearby. The Elder Brother is well known for his potent powers as a healer, I think this was another hint pointing towards Sandor being treated for his wounds and still lives.

However, there is one quote by the Elder Brother that could go against this theory:

"I buried him myself. I can tell you where his grave lies, if you wish. I covered him with stones to keep the carrion eaters from digging up his flesh, and set his helm atop the cairn to mark his final resting place."

Source: A Wiki of Ice and Fire: Gravedigger/Theories.

I personally do not believe we have seen the last of Sandor.