The fire went out and i cannot find any dry grass anymore - is there a way to correct this?

Get firewood and dry grass, then let the villagers take the dry grass and the firewood, and then make one of the villagers start a fire

the dry grass section is gone - in my game i tried restarting and still no dry grass

Are you sure that you're looking in the right place?

up near the brambles between it and the cocount trees

The dry grass is to the left of the coconut trees.

What happens if the fire does go out... I set my game to half speed and am going to be away from it for until I get back to "work", last time I checked it was 5 hours.... I totally forgot to put a log on the fire before I left. Will everyone be there when i get back?

If there's a trained healer in the village, they should be fine. The villagers get sick a lot more when the fire is out.