@Framing A Moose I'd argue the concepts of lies and truth fit both life and death very poorly. Death is the great unknown that every person will certainly experience. We can only speculate about its implications and meaning, but that is all there is. The only truth about death is its certainty, and all else is speculation. Is death painfull? Of course it is for the living left behind, but does that make death painful or the loss of the living? Death isn't painfull, or at least not confirmed, but loss is.
Life, what is true or false about life? Life is a physical object having biological processes at its very base. Anything else, how we live life and perceive life, is simply what we make of it. This perception may be true or false, but ultimately every perception is speculative. Does life have a meaning? Is life beautiful? It is only so to those who perceive it to be like that. As such, the truth of falsehood of life doesn't really exist. What only exists are truths of falsehoods about our perceptions of life.
I personally perceive the quote as the beautiful lie being the joy of living, while deluding oneself that the horribles in life do not exist. Death is a tragic, inevitable thing that causes grief in the living left behind. Thus, I perceive the painful truth as the loss experienced by the living that impairs their joy.
A little too philosophical? XD