IIRC it is stated in the Visuddhimagga that one seeking to develop the sign (nimitta) of metta as a samatha meditation object should not direct one's efforts towards the dead for it is impossible to develop the sign when visualizing the face of someone who is dead. It then gives a fairly stock example of Bhikkhu X attempting metta towards his master who unbeknown to Bhikkhu x is now dead, Bhikkhu X then visualizes his preceptor or someone and attains the sign.David N. Snyder wrote:I know that sometimes we Theravadins say that metta cannot be extended to the dead
That's the only source I've come across regarding this notion, and as I do not take the Visuddhimagga as the bottom line on things, I am inclined to believe that metta meditation towards those who have already passed is still a fruitful exercise (Not that to my recollection the Visuddhimagga ever excludes this possibility anyway).
But that's just me.
