OK, I have to apologize, I have verified on 2 characters that Mad King deaths DO NOT count toward your /deaths total or against the survivor track.
I left both accounts online last night while I slept. Loew Shikaku got a Wicked Hat in Kamadan (along with a few random items for not doing something when the Mad King did not say "Mad King says..."). I also got a Pumpkin Head on Eildert Derk in Lion's Arch. It is NOT the same head has last year's pumpkin head. I caught the 6AM eastern visit while I was getting ready for work with my lvl 3 Dervish and even though I missed a few things, he still has 0 deaths, but now has a hat too. A few appropriate emotes at the right time got me a few extra items too.
I have left Gabriel Krug (Paragon - 83,000xp, no deaths) in Kamadan and Trytt Krug in LA until I stop home at lunch.
The random items in both continents DO include transmogrification potion on both continents, only collectors in Elona have it though. I'm glad I sold the sentient roots I got for 300g each before the Mad King began showing up.