Revelation 20 is dangerous ground upon which to walk. To comment on it assumes so much. It assumes a particular way of reading the whole apocalyptic drama. It assumes a particular structure to the book. Consequently, there are many ambiguities, varied understandings and even some nasty polemical controversies associated with this text.
Nevertheless, I will venture into these choppy waters in order to make a very specific point based upon my understanding of this text. And I do so only to share a pastoral meditation that I find quite meaningful.
In Revelation 20:1-3, Satan is bound. Whatever that means, it means he is not destroyed but only limited. Simultaneously, in Revelation 20:4-6, the martyred saints (those beheaded) and others who have overcome (they did not worship the beast) reign with Christ on thrones. Those who overcome sit down with Christ on his thrones–it is a co-regency (cf. Rev. 3:21). They share in the glory of the kingdom of God. These thrones, as are all thrones in Revelation, participate in heavenly glory–they exist in the throne room of God, in the heavenly sanctuary, the heavenly dwelling place of God.
These saints (“souls”) participate in the “first resurrection.” This resurrection is described at the end of verse 4 as: “they came to life and reigned with Christ a thousand years.” I believe is this an affirmation, similar to the picture in Revelation 7 or Revelation 14:13, that those who have passed from earth to heaven, those who have died in the Lord actually come to life when they pass through the portals of death. When the saints of God die, they come to life. They enter the presence of God and reign with Christ on his throne. They are seated on thrones surrounding the throne of God himself. They share the heavenly glory of Christ himself.
The “rest of the dead” –apparently those who do not share in that glory–do not “come to life” until the judgment day when everyone experiences the “second resurrection” (or the resurrection from the dead where bodies are raised to meet God). I tend to think that the righteous dead, according to this text, life with Christ, but the unrighteous dead (the rest of the dead) are not conscious of their state until the “second resurrection” (that is, the general resurrection of the dead when all will be raised with bodies once again).
Those who participate in the “first resurrection” will not participate in the “second death.” The “first” and “second” imply a contrast with missing components. What is the “first” death and the “second” resurrection? I believe the first death is physical death. The souls enthroned with Christ experienced the first death but as participants in the “first resurrection” they will not experience the “second death.” These “souls”, however, await the newness of creation–the time when creation will be renewed, including their own bodies in a (second) resurrection. The “new heavens and new earth” will appear along with a “new Jerusalem.” This newness is the (second) resurrection of the cosmos–a renewed creation with renewed, transformed bodies in which the saints participate.
Where are the saints who have died in the Lord? They have experienced the first resurrection. They came alive in their death. They live in the presence of God, reigning with Christ as they await the final consummation; as they await the renewed heaven and earth. They are not dead, but alive. But they are not yet complete, not yet all that God intends them to be….they wait for the new heavens and new earth just as those living upon the earth do. But though they died, they are yet alive.
If you are interested in a more detail presentation of this perspective, I suggest reading the excellent article by Don Garlington.