Do dead corpses in town bypass town defenses?

I've never experienced it, but it's to my understanding that it's the second one and that they do bypass the town's defenses and terrorize people that would then only have their house defense and defensive items in their chest to save them. The first one where they get added to the attack is if you throw them out of town.

Because of people liking their brains, disposing of them is worth your AP or water in almost every situation. The only time that it wouldn't would probably be if you don't have enough defenses to protect against the attack anyway, but watering them would still help there, and you would pretty much be doomed then anyway.

EDIT: I found it in the Die2Nite help under "The Attack of the Hordes" now:

Phase 1 : The Return of the Living Dead

All the citizens who died in the town the night before and whose corpse has not been destroyed or dumped in the desert will rise again ! As they are already within the town walls, they'll do untold damage !

The dead who have been dumped in the desert will attack the town as one of the Horde.