I helped a group about a week ago and the same thing happened. He transformed a split second after he died and we did not get the achieve. I will search the forums and see if there is any known actual bug with the achievement. This achievement has been one to really test my patience!
Wasnt I in that group with you, with two rogues. This is definitely bugged. If anyone has any ideas, let me know, Im specced Interupt Fan of Knives on my Combat Spec so I can cover the normal interupts, its the transform after he dies that gets me.