Um...no, I'm pretty sure episode 5 is not titled "Dead of the Silver Lining." (Hark, do I smell the birth of a zombie/Silver Lining crossover?)
Oh wait, you're asking if episode 5 isn't going to be released? The team has emphatically stated "yes" many times now.
And GrahamRocks, there are plenty of instances in fiction in which a terrible decision must be made, or a character's sacrifice becomes ultimately pointless. They're called tragedies. TSL is based on the works of Shakespeare (allegedly). What was Shakespeare most famous for?
Sorry, but not every story is going to be tied up in a pretty little bow. That may have been the case when the official KQ series was doing its run, but TSL is a product of the 2010ish era, and standards have changed. That's one reason Twilight is so reviled--no big sacrifices need to be made, no ultimate showdown, no casualties whatsoever. Twilight is sugary sweet, optimistic, and as such, incredibly behind the times. Hunger Games is a more accurate representation of today's gritty standards, and if you get bummed out about the trials and tribulations of fictional characters, you'll want to stay far away from it.
Long story short, TSL is more cruel, twisted and depressing than the rest of the KQ series, because that's just how stories are nowadays. And something tells me it's only going to get worse in the final chapter, so everyone better steel themselves up for it.