Manhattan's own description of the event was that he was "restructuring [him]self after the subtraction of [his] intrinsic field." Milton Glass' account was that Osterman "was completely disintegrated, at least in a physical sense. Despite the absence of a body, a form of electromagnetic pattern resembling consciousness survived, and was able, in time, to rebuild an approximation of the body it had lost." That is the most complete and detailed description of the event I've been able to find in the text, and it reads to me like Osterman's body was destroyed, and his mind, or soul, was able to build a new one.