What does this phrase from "The Adventures of Tom Sawyer" mean?

In the following passage from chapter 8 of the book The Adventures of Tom Sawyer:

"He sat long with his elbows on his knees and his chin in his hands, meditating. It seemed to him that life was but a trouble, at best, and he more than half envied Jimmy Hodges, so lately released; it must be very peaceful, he thought, to lie and slumber and dream forever and ever, with the wind whispering through the trees and caressing the grass and the flowers over the grave, and nothing to bother and grieve about, ever any more."

It is mentioned that Jimmy Hodges has been "lately released." Does this mean that Jim Hodges has recently deceased? Please explain how "released" means "deceased."

Yes, it means that Jimmy died recently. I read released as a short version of released from this mortal coil, which would be a variant of a well-known phrase:

to shuffle off this mortal coil

According to Wikipedia, mortal coil

Mortal coil is a poetic term for the troubles of daily life and the strife and suffering of the world. It is used in the sense of a burden to be carried or abandoned. To "shuffle off this mortal coil" is to die, exemplified in the "To be, or not to be" soliloquy in Shakespeare's Hamlet.

As to how released means deceased, The Free Dictionary defines release as:

1a. To set free from confinement or bondage: released the prisoner 2b. To relieve of care or suffering: Only death could release him from suffering.

Life is often seen as -- and often is -- hard and full of sorrow, and so death means, in the final words of the passage you quoted:

nothing to bother and grieve about, ever any more.

There is no direct connection between released and deceased, released is just a poetic way of saying deceased. Decease comes from the Latin root decedere to die, and release comes from the Latin root relaxare, to loosen, stretch out.