The rules clearly say that when a hero is KO'd you put them off the board and put a dead man's coin on their card therefore there is always a total of a combo of heroes deployed and dead man coins equaling 3........ I don't see how you can get a different hero on the board. Is there a difference between a hero dying vs being ko'ed?
The dead mans coin is temporary. It is first placed one it black side up, then it is flipped to the gold side, it is then removed. That hero is then in reserve and can be redeployed or can be kept in reserve and another hero may go into play.
This rule can be found in the "Prepare Reserve" Section of the Player Turn in the rulebook.