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Make sure your traffic is running fine. If the hearses can't get to their destination in time then there's your issue.
If there aren't traffic problems, you don't have enough hearses (or they aren't spread out enough) to cope with the death waves in your city.
I'm at 50K with no hearse problems.
I'm at 130k and have no service issues and no traffic issues. So, it is possible...
EDIT: After reading OP's post again, I think I see the problem. If you use a lot of 1 way roads, they will play hell on your services. Your services have to follow those roads too and it will hinder them from getting to places quickly. One way roads may be perfect to avoid traffic jams, but they reduce the coverage of your services. So, either use less one way roads or carefully check how far and which way your services must travel to get to the required destination. Then place more service buildings to allow them to cover more ground faster. This is of course pretty expensive.
It might be doable in the late game, but in the early game I couldn't get a city with a lot of 1 way roads to work efficiently. I had to place crap loads of service buildings to get a good coverage and then I couldn't make any money.
And just to be sure, I'm assuming you've clicked on the hearses building and made sure they are not using the maximum amount of hearses, right? If they are using the maximum amount of hearses, it means the building is at maximum capacity, and so you need to place down another building.
You mean that a system that works in real life is silly in a game? I am... confused.
Sounds like a good idea for a mod/DLC.