I think most would agree with you Haido ... but then is an avatar entirely separate from the God?
A true avatar starts as part of a God and is attenuated from His substance ... so though the avatar might be killed it would not really be mortal assuming that part or all of it is then subsumed back into the corpus of the God.
I'm not sure if the person who was killed in Oblivion was even Mannimarco at all, avatar or not. Could have been an imposter. Who knows? He went down far too easily, even at the highest difficulty. (Even my BARD killed him, and due to game mechanics that's really saying something.)
There is http://www.imperial-library.info/obscure_text/nu-hatta.shtml, however, which is perhaps more canon than mine. Or not...I'm under the impression that even things written by the Devs are never absolute canon in this series, as each piece of parchment is written by a biased third party with his own political interests.
This theory of course maintains that Mannimarco was immediately stripped of his godhood by the Jills of Akatosh, but that a new god, the God of Worms Mannimarco, was created at the same time...meaning the two beings are very separate and that the original Mannimarco can be killed.
I'm skeptical. If the Jills could undo this, why not undo all the changes made in Daggerfall? It makes no sense for this to be the only one.