I love thee, Dwarf Fortress, for leading me to the 'Death' and 'Decomposition' pages of Wikipedia :> Classic, and I know more for it!
True decomposition :| The DF wiki says:
A corpse has several levels of decay, it will begin as "(creature or name) corpse", progress to "rotten (creature or name) corpse", "(creature or name) partially decayed corpse", and then to "(creature or name) skeleton", and will remain a skeleton indefinitely. If the creature had had parts ripped or cut off before death, the corpse will be described as "mutilated corpse" and "partial skeleton" in respective descriptions, and the parts (if still on the map) will decay into a type of bone depending on the part. A creature with parts that were pulped (i.e. exploded into gore, cloven asunder, torn into shreds, etc.) before death will be described as a "mangled corpse".
The wikiPEDIA says (with some severe edits):
STAGE ONE: 'Fresh': Nothing too special here, a fresh dead body (as fresh as it will ever be, anyway..). Your cells go rogue and release enzymes that promote deconstruction (BETRAYAL! Lets genetically edit that out of ourselves somehow.. anyway..). You go stiff, your last bits of oxygen vacate the premises, and your cooling corpse starts to become an acid-and-gas factory. Also, "Blowflies and flesh flies are the first carrion insects to arrive, and seek a suitable oviposition site."
This stage is present enough in DF as is and needs no love..STAGE TWO: 'Bloat' (mmm!):
"The accumulation of gases within the bodily cavity causes the distention of the abdomen and gives a cadaver its overall bloated appearance. The gases produced also cause natural liquids and liquefying tissues to become frothy. As the pressure of the gases within the body increases, fluids are forced to escape from natural orifices and enter the surrounding environment. The buildup of pressure combined with the loss of integrity of the skin may also cause the body to rupture."
Corpses in-game should rupture (which would be mood-damaging to the undisciplined to see) Maggot feeding, and the accumulation of gases within the body, eventually leads to post-mortem skin ruptures which will then further allow purging of gases and fluids into the surrounding environment.
Towards the end of this stage the body should be stinking twice as hard and generating maggots and flies fairly generously, maybe even small amounts of disturbing liquid discharge.. STAAAAGE THREEEE: 'Active Decay' (things are getting serious):
Active decay is characterized by the period of greatest mass loss. This loss occurs as a result of both the voracious feeding of maggots and the purging of decomposition fluids into the surrounding environment. The purged fluids accumulate around the body and create a cadaver decomposition island (CDI). Liquefaction of tissues and disintegration become apparent during this time and strong odours persist.[4] The end of active decay is signaled by the migration of maggots away from the body to pupate.[6]
Have to get this out of the way, first: I love (LOVE) that some poor fool has to deal with 'cadaver decomposition islands' so often that they said "SCREW IT!!" and started abbreviating Anyway, this would obviously create a moderate pool of highly unlovable liquid slurry around your dear departed dwarf (or meaty corpse in general), the stink would continue, and apparently the maggots would disappear into a majestic flysplosion..ALL POINTS THIS ROUND ARE DOUBLED!! STAAAAAAAA-AAAAAGE FOOOOO-OOOOURRRRRrrrrr! 'Advanced Decay':
"Decomposition is largely inhibited during advanced decay due to the loss of readily available cadaveric material. Insect activity is also reduced during this stage. When the carcass is located on soil, the area surrounding it will show evidence of vegetation death. The CDI surrounding the carcass will display an increase in soil carbon and nutrients, such as phosphorus, potassium, calcium, and magnesium; changes in pH; and a significant increase in soil nitrogen."
Okay, I'll apologize for the flashy intro to stage four, and the whole 2x points thing (I'm not doing that), because stage four isn't the best.. Intensity dropping overall, sadly: less bugs, less stink, less dwarfyness. Also the CDI-slurry kills any present plant-life while simultaneously infusing the ground with nutrients..stage 5 'Dry/Remains'(its crap):
"During the dry/remains stage, the resurgence of plant growth around the CDI may occur and is a sign that the nutrients present in the surrounding soil have not yet returned to their normal levels.[9] All that remains of the cadaver at this stage is dry skin, cartilage, and bones,[4] which will become dry and bleached if exposed to the elements.[7] If all soft tissue is removed from the cadaver, it is referred to as completely skeletonized, but if only portions of the bones are exposed, it is referred to as partially skeletonised."
Here you basically end up with the current in-game dried up skeleton, just with bonus radial planting ground..So, the tl;dr: slurry n' flies.
There are other circumstances though, like rotting in the underground caves (sounds fungus-friendly), or underwater, or in a sealed and dry environment (much like a dwarven bedroom or hospital) that aren't nearly as dramatic as an open-air, open-element, fly-driven meltdown :> All this would really change is adding a gruesome penalty for leaving your dead outside or in wet or bug-habitat areas.. Then there are other specifics, like whether or not your dwarfcorpse got assaulted by flies before being hauled to a dry place, or whether or not a single wayward fly could slip through into your corpse-storage and infest the whole bunch into melting gooey stink-piles or not..
Now I just keep imagining the CDI-tsunami a big field of 50+ slain enemies would generate before it dried up
Also, none of this is relevant at all if you stick them in a coffin (or lava accompanied by an honorary slab, or lava and forget the slab) before that third stage kicks in..