My fortress just barely survived something like that, although on a bigger scale (six dead adults and two dead babies, immediate tantruming and miserableness that swiftly became insanity). I let it run its course for a couple of seasons, then had to step in forcefully because one founder went berserk and two more were on the verge of joining the ranks of the miserable. By then things were starting to improve, but it was still threatening to take down all sorts of favorite dwarves.
I pretty much just grabbed everyone that wasn't miserable and turned off their hauling labors so they would party and socialize near some pretty statues. The ones that already hit rock bottom were allowed to continue dragging the lost clothes of the dead to stockpiles or their rooms, and I built up a fortress guard to throw them in jail to help keep them out of trouble (which didn't really help when the mayor broke out of jail by himself and no one bothered to feed another prisoner until it was too late, but hey). If they cheered up on their own or were thrown and jail and then released, they were allowed to join the socializers. In the end, I went from a fort of near 140 to somewhere around 80 (immigrants decided to join the fray, which threw off my numbers), most lost to insanity (maybe about ten murders and executions/severe beatings/failures of prisoner care combined). A shame it was such a slow trickle of crazy, or else I would have let the fort die. Maybe I just need to pick a location with magma next time so things will get really interesting.
On the plus side, this whole debacle killed off the count, his consort, and the tax collector, and it gave the hammerer injuries that left her bedridden for two seasons and gave her a minor spine injury. I think we can all agree this is a wonderful thing, especially because the countess went berserk and became a pincushion.