1. Happily he died. [without a comma]
2. Happily, he died. [with a comma]
According to a Chinese professor of English: #1 means "He died in a happy way"; #2 means "Fortunately, he died." But I think #1 is not correct. It should be rewritten as "He died happily." Is #1 really acceptable?
Thank you very much for your reply.
Your professor is right, but so are you.
The only excuse to use that format would be poetic or rhetorical. Even then, I would use something along the lines of "Happy he lived, happy he died." Your phrasing is better (He died happily" (referring to the way he died) or "he died happy" (he might have been hit by a truck but he was laughing when the truck hit him). It's a matter of whether the adverb "happily" modifies the verb "died" or the adjective "happy" modifies the deceased "He."