I stumbled upon this phrase in Urban Dictionary and was rather taken by surprise to know that it is a slang expression for a person who has died (or will die in the immediate future.)
Medical speak for recently dead.
Since UD is not the most reliable of sources(although I find it useful to understand slang usage), I tried to find the phrase elsewhere and got a Wikipedia entry under "List of expressions related to death"
(Euphemistic slang) To die.
Used frequently by talk radio icon Rush Limbaugh on The Rush Limbaugh Show, generally when a dictator or an avowed enemy of the United States has died. Originally used in his first book, The Way Things Ought to Be. See also Jargon of The Rush Limbaugh Show.
What I think…
Normal body temperature is 37°C. Comfortable Room temperature is around 20°C-25°C. If somebody "assumes room temperature", their body temperature has gone down, thereby indicating their death(?)
I decided to consult Ngram and I did get lot of usage results. However, they seem to be related with scientific experiments ("Experiment assumes room temperature" and so on…) rather than a slang phrase in English.
Best Answer
Reproducing Dan Bron's wonderful comment as answer, since I feel that is the best plausible explanation.