Somewhat long post, so please get your Ritalin if necessary.
Anyway, I can't get this quest to start. It's actually very annoying since I read up on all the glitches involving the purchasing of the properties before playing the game, so I made it one of my first priorities to get all the houses as soon as I could. I bought all of the properties in the order of: Whiterun, Riften, Markarth & Solitude without any issues (no broken quests, all house display options work, etc.).
So far, I have only completed the Companion's quest line. Just met the Grey Beards for the Main quest, did the first quest in the College of Winterhold, Haven't done any quests in the Dark Brotherhood or Thieves Guild. I'm 80 hours into the game, mostly just doing side quests and exploring non-quest dungeons...and of course, becoming the Thane of each hold so I could purchase the properties. Now I'm at the point where I have to side with either the Stormcloaks or the Imperial Legion to be able to get the house in Windhelm (the house I actually want to use), so I decided to join the Imperials. I did all the quests up until "The Battle for Fort Amol". I remembered reading that the "Blood on the Ice" quest wouldn't be available if you let the Empire take control of Windhelm, so I decided to try and get this quest and complete it before finishing the Imperial Legion quest line. I followed all the steps to get the quest started...and nothing happens (no corpse/crowd at the graveyard).
Luckily, I had multiple saves, so I could try and figure out what was causing the quest to not trigger. I tried to use a save before finishing "The Jagged Crown" quest (another very buggy quest), no luck. Tried using a save before joining the Imperial Legion/Stormcloaks, no luck. I have only been to Windhelm once prior to doing any of the above and that was to complete one of the miscellaneous objectives to deliver an item to the White Phial alchemy shop.
So, I'm assuming the glitch that prevents this quest from triggering properly occurs when you first enter the town. I finished the Misc. Objective early in the game (20-30 hours in the save), I didn't come back to Windhelm until I had to do the "Deliver a Message to Whiterun" quest for the Imperial Legion (about 72 hours in the save). During the time I was testing this, all NPC's involved with the quest were alive, so this wasn't an issue either.
I started a new game just to see if I could start the quest like it should. After entering Windhelm for the third time (straight from the start of the game), I got the scene at the graveyard along with the quest start. So, my advice to anybody trying to avoid this glitch is to try to start the quest ASAP from the start.
Now, my question is...has anybody actually figured out what exactly breaks this quest? And if there is a way to get it started without restarting?
From what I can gather, the quest just doesn't get triggered sometimes. It hasn't been triggered for me yet, which is maddening, because I really want that house. It seems to just be really buggy in general, so we might have to wait for a patch.
Anyway, so far what I've found in my search for answers as to how to get this quest to trigger, is that apparently you have to leave and enter Windhelm at least 4 times, and after that, if you go to the graveyard at night, there will be a group of people mourning over a body, and you have to talk to the guard to get the quest to begin. I still haven't found the funeral party yet, though... I just keep going back to Windhelm every few game days.
Also, at the risk of being slightly spoilery, if there is a woman called Suzanna the Wicked still in Windhelm, the quest has not yet triggered so there is still hope for you if you check the graveyard at night every so often.
That's all I know so far. I'm still waiting for the quest to start, like I said.