Information garnered on the internet:

Newspaper article on the skin suffocation myth.
"Dear Cecil:

Remember the rumors that circulated when Goldfinger first came out? Well, we do, and we'd like to know if they have in any basis in fact: if your skin is covered with gold paint (or any other color paint, for that matter), will you die as a direct or indirect result? Why? --Columbia, Jackson Park, Chicago

Dear Columbia:

As I recall, the consensus at the time the movie appeared was that you would die of asphyxiation somehow. There was a notion abroad in those days that you breathed through your skin. Well, science--or at least the popular understanding of it--has made mighty strides since those early years, and it is now known that you do not breathe through your skin. You breathe through your mouth and nose. So much for the asphyxiation theory.

Nonetheless it's true that if someone gilded you, you would very likely die. However, death would result from what amounts to an extreme case of heatstroke. Paint would clog the pores, thus preventing perspiration and ruining the body's principal means of heat regulation. You'd develop a high fever, and after a few days of unbearable suffering you would expire. Lead or other toxic substances in the paint might contribute to your demise.

I might mention that anyone contemplating a death of this type should take care to coat the subject as completely as possible, since partial coverage will result only in an increased rate of perspiration across the unoccluded surfaces. Particular attention should be paid to the palms, armpits, and the soles of the feet, which contain a great number of sweat glands. Call me Mr. Unimaginative, but I think it'd be easier just to hit the guy over the head with a rock.


Newspaper article on 'skin suffocation'

"'A nugget of truth to 'body dipped in gold'

            By Bill Sones and Rich Sones, Ph.D.

      Question: Did the classic James Bond movie "Goldfinger" get it right when Jill Masterson (Shirley Eaton) died after being dipped in liquid 14-carat gold? Could skin suffocation really happen?

      Answer: This is largely urban legend, though Shirley Eaton's autobiography explains that the filmmakers believed their own script, for they left a patch of her abdomen unpainted, says Steven Connor in "The Book of Skin." "She died of skin suffocation," said Bond to his spymaster M. "It's been known to happen to cabaret dancers. It's all right so long as you leave a small bare patch at the base of the spine to allow the skin to breathe."
      Actually, the skin doesn't breathe and does not draw its oxygen from the air. If it did, wearers of tight support stockings for varicose veins would be in trouble, as would swimmers who stay mostly underwater for long periods. And occlusive ointments such as vaseline are frequently prescribed to cover the entire body, but no one dies.
      The germ of truth to the Bond tale, says University Of Pennsylvania dermatologist Dr. Michael S. Lehrer, is that such a covering can prevent sweating and cooling, and thus bring on heatstroke and death. Or the toxic chemicals in the gold or paint might themselves prove fatal.
      But that's hardly the stuff of silver-screen legends." article on the urban legend about the death of the actress in Goldfinger.

   The actress who portrayed Jill Masterson in the James Bond film Goldfinger died from asphyxiation after being covered with gold paint.

Status:   False.

Origins:   In Goldfinger, after secretary Jill Masterson betrays her boss, the evil Auric Goldfinger, he kills her in style by painting her entire body gold. As James Bond explains when Masterson's body is discovered, covering a person with paint will cause death because the body "breathes" through the skin. He then goes on to state that professional dancers know to leave a small patch of unpainted skin at the base of the spine to prevent their falling victim to asphyxiation.

Although it was still widely believed at the time Goldfinger was made (1964) that we "breathe" through our skin and that closing off all the pores in one's body would result in a quick  death, we now know this to be false. (Another commonly accepted part of this concept was the notion that leaving a small portion of the body unpainted was sufficient to ward off disaster.) As long as a person can breathe through his mouth and/or nose, he will not die of asphyxiation, no matter how much of his body is covered with paint (or any other substance). This isn't to say that painting yourself isn't unsafe, however -- clogging all your pores prevents you from perspiring and could eventually cause you to die from overheating, and toxic substances found in paint could contribute to your demise if you stay in a painted state too long.

When Shirley Eaton, the actress who portrayed Auric Goldfinger's doomed secretary, was covered with paint for the "gold corpse" scene, the studio had a few doctors standing by to ensure that she was not overcome by the effects of the paint. She wasn't completely naked in this scene (she wore a G-string), and, bowing to the beliefs of the day, a six-inch square of skin on her abdomen was left unpainted as a precaution (to allow her skin to "breathe"). Eaton did not die or even become ill as a result of her Goldfinger experience -- she made a few more films before retiring from acting to spend more time with her family.

On the surface this sounds like a pretty silly story -- as if the producers of a movie decided to film a murder scene by really shooting one of the actors. The sight of the dead, gold-painted girl in Goldfinger is one of filmdom's most memorable images, however, and in 1964 Shirley Eaton's prone, golden body was displayed everywhere (including the cover of Life magazine). People believed that being covered in paint would cause death, and this woman had obviously been painted, so . . .

Incidentally, Goldfinger was not the first film in which a person was killed by being covered with gold paint. That honor belongs to the 1946 Boris Karloff movie Bedlam. "

From an an encyclopedia article on Goldfinger

"Although James Bond films are not known for their technical accuracy, but rather for outlandishly plausible action, one incident in this film bears mentioning.

In one scene, the villain's girlfriend, Jill Masterson, is murdered by "skin suffocation." She was painted with gold paint and died, because her skin was unable to breathe. According to urban legend, the concept was based on the death of Swiss fashion model who painted herself and asphyxiated.

Though this is a plausible explanation for this unusual method of killing, it has been argued whether or not it is possible. Humans, being mammals, achieve respiration via their mouths and nostrils to fill their lungs with air. The only animals that must breathe through their skin are insects and worms. In fact, were it true that people breathe, in auxiliary fashion, through their skin, it would, therefore, be impossible for people to engage in extended bathing, mud baths, scuba diving and, indeed, body painting - activities requiring extended covering of the skin. If one did try murder via gilding, the victim would die of heat stroke, but only after a long period and not in the manner shown in the movie. The gold paint would clog the pores and prevent perspiration, rendering the body unable to properly regulate its temperature. Dying in this fashion, however, would take several days and is a very inefficient manner of killing.

The Discovery Channel series, MythBusters, has twice attempted to prove or disprove whether skin suffocation due to paint was possible. In both experiments one of the hosts of the series was covered head-to-toe in gold paint. The first experiment was called off when the subject began experiencing breathing and blood pressure problems. In a follow-up experiment, a different subject was covered but this time showed no ill effects."

I happen to have the video of Adam Savage being covered in gold paint for a long time on the episode of Mythbusters, and cut it to show the pertinent information. It can be downloaded here.
640x480, 34 seconds, 3 megabytes.