I believe it has been suggested that the SB should post a dead small. I would not make the same ruling, but I may have misunderstood the situation.
Just to make sure I understand the scenario correctly:
Hand #1: Assume Seat 1 (Button), Seat 2 (SB), Seat 3 (BB). Seat 3 is eliminated.
Hand #2: Seat 2 (Button), Seat 3 (vacant - dead small), Seat 4 (BB).
Hand #3 IF played correctly: Seat 3 (vacant - dead button), Seat 4 (SB), Seat 5 (BB).
Hand #4 IF played correctly: Seat 4 (button), Seat 5 (SB), Seat 6 (BB).
However, what actually happened, was the "correct" hand #3 was skipped, and action went straight to "correct" hand #4, with Seat 4 thus missing SB. If this is what happened, we should note that Seat #5 also missed his BB as well.
In this case, I would bring the button back to Seat 3, and play out the hand with Seat 4 as SB and Seat 5 as BB. On the next hand, the button will skip ahead to Seat 5, with SB and BB being posted as normal, thus resuming the normal rotation of the button. Essentially, we played both "correct" hands #3 and #4, just out of order in this case due to the incorrect placement of a button.
Robert's Rules:
IRREGULARITIES
1. In button games, if it is discovered that the button was placed incorrectly on the previous hand, the button and blinds will be corrected for the new hand in a manner that gives every player one chance for each position on the round (if possible).