With reference to the story in which Zhuangzi is lectured by a skull in a dream (Chap. 18), Wu (The Butterfly as Companion) quotes from the Inner Chapters: "Who knows that life and death, existence and annihilation, are a single body? I will be his friend!" (Chap. 6; Watson) Wu takes away from the story of the skull that it is in fact his skull, that his own death is ever with him in life, and that the joy of the skull in death should be a part of his joy in living. Indeed, it is a prerequisite to joy in living. In other words, living death is allowing that "death and life, existence and annihilation" should in fact truly be "a single body".
It is not simply that we are exhorted to accept death as a future inevitability. If life and death are a single body, then they are a single body now, in life. Our conscious being in the world is to be extensive enough, vast enough, as to include not only our living, but also our death. Now that's vastness.
This is not an easy thing to understand, let alone do. Even were I able to explain it well here, it would not enable you or me to actually experience it. That takes work. Engagement is necessary.
Living life and death now as a single body certainly brings a new perspective to our living. I have previously written that in a sense the theoretical sage (or enlightened one, if you prefer) exists as the living dead. If death is the extinction of the self (which to affirm would be an "unorthodox" view, but which I take as the most reasonable and informative "what if?"), then the sage who has "lost his self" (egoic self-identity) is one who has already realized death in life. And therein is her freedom. Living life and death now as a single body is therefore both an expression of this freedom and a means whereby to experience it. Expanding one's life to include one's death, not simply as a future possibility but as a present reality, frees life to enjoy both life and death. You are already dead — and death's skull (your skull) laughs and declares it all a joy.
Wu's meditation is both bold and subtle. Consider this: "The dry empty skull has three reasons for its joy that can never be taken away: It is a skull, it is dry, and it is empty." To this my heart burns incense. It is what it is; what could be better? Wu quotes that phrase (in fresh words) that so impresses me: "the under-heaven is safely tucked away in the under-heaven". When life and death are a single body, what is there that can be lost?
Speaking to Zhuangzi in the dream, this roadside skull declares itself to be a participant in the totality of heaven and earth, one with the passing seasons. "When you are dead," said the skull, "there’s no ruler above you and no subjects below you." (Mair) Wu replies, "All this is mine as long as I live with my own skull. To live with my own skull amounts to living with the heaven and the earth, season after season."
You can check out Scott's writings on Zhuangzi here.