How does one handle politely one who blurts out to you in front of others in the middle of a dinner party: "So I hear your father died?" I thought it was inappropriate; did my best to change the subject - it was an awkward, and painful, moment.
Please accept Etiquetteer's condolences at your bereavement. During a time of so many emotions, Etiquetteer imagines that you found it comforting to join groups of friends for intimate gatherings - until questions like this came up.
Etiquetteer remains astonished at the Blind Idiocy of Some People, who never seem to understand that some matters are more delicate than others. It's one thing to be asked "How is your father?" but quite another to be asked "So I hear your father died?" The use of the word "died" automatically indicates that Mr. Nosey expects that something with a Strong Emotional Impact happened to you and your family, and is too curious about the specifics to consider what impact that Sad Event had on you. Certainly it's an inappropriate question to ask at the dinner table as part of general conversation! At least at a cocktail party you could have changed the subject by moving away. That's difficult to do at the dinner table without Making a Scene, which Etiquetteer knows you didn't want to do.
In situations such as this (awkward questions at the dinner table, when everyone around the table is bound together by Appetite if nothing else for the foreseeable future), what's most important is to maintain the atmosphere of general and pleasant conversation; this will reassure the other guests that they are not about to witness a Dramatic Scene. The polite way for you to handle this is to acknowledge how awkward and painful the question is, but with Great Calmness, and then introduce another topic. "Yes, Father died [Insert Distance of Time Here], and it feels really awkward to be asked about something so painful at the dinner table. I'll give you the particulars later, but now I'd much rather talk about [Insert Diversion Here]." The Diversion might even be the specialty of Mr. Nosey, which will get him thinking about something else.
Should questions persist - because Some People are too ill bred to Take a Hint - your Last Resort is to excuse yourself and head to the bathroom. Whether you need a good cry or not, hopefully your absence from the table will lead someone else to tell Mr. Nosey to be quiet.
Special Advice to Those Who Want to Know: If you really must ask someone about a death in their circle, do so privately and not in such a way that they feel a spotlight is shone on their private grief. It's natural to want to know, but selfish to call it out.
Long story short, Sensitivity trumps Curiosity.