The genetic changes that "created" humans from the humanoid beings that preceded them was the separation from nature (God) that Nietzsche, whether he realized it or not, was referrring too. The procession of human intellectual and technological progress from that point forward, has proven humanity's inability to recognize its responsibility toward nature (God). Instead, humanity has created a false journey toward an ethical society doomed to failure. It has continually disregarded a call to return to that humble connection to and reverence of the natural world. As it stands and to this point, we have failed miserably in the capacity of gods.
The question is: with our proclivity toward mismanagement in full bloom, can we humble our "supernatural" intellect and technological prowess to return to a sustainable co-existence with the biosphere and thereby resurrect and renew the image of God? I fear the madman had reason to " up his requiem aeternam deo."

The crazy man announced in the market place (which is significant), god is dead, and we have helped kill god.

It is my belief that this assertion generates the problem of interpretation, that the demystification of myths - as say conducted by the project of the Enlightenment, Sapere Aude - leads to the problem of finding meaning in a world which is no longer god centered.

This does not mean that there cannot be religions, churches, religious beliefs, or holy wars, just that an all-encompassing cosmological story-system in which everyone could fit into, a system which provided a background, a place and significant life meaning for the individual is now radically missing and in its place are mere structural relations in which what you do in say the market-system amounts to an absolute ontological condition of what and who you are.

The consequence is a newly constructed category of the individual, no longer a member of the community of God, but the atomised competitor, someone who must construct their life in singularity, upon their own resources.

The threat of such an endeavour is potentialy nihilism, - a culture in which there is no essential and permanent fabric in which to construct meaning, no enduring beliefs which can provide meaning for all its members of that culture.

It brings with it the sense of finality in which many will already know that their interpretative pursuits and those of others are always-already bound to fail.

All he meant (I imagine) is that the concept and the belief in God, so powerful at one time, was weakening and dissipating by the middle to the end of the 19th century. Which was true. Hume, Kant, and Darwin, had taken their toll. Of course, literally speaking, "God is dead" is nonsense. But no one should accuse Nietzsche of speaking literally. This was a jazzy way of talking about the dissipation of the concept of God. The notion (such as it was) arose again 1965 or so in America and, "the death of God movement". As Marx said, history repeats itself, "the first time as tragedy, the second time as farce". Although in this case, the first time was pretty farcical too.

The Oedipal explanation is much more likely... ..

It is? As an explanation of what?