Although giant lemurs are generally supposed to have become extinct during the Pleistocene, there is no apparent reason for this, since they would not have been threatened by carnivores and their food supply remained unchanged. It seems far more likely that man was the guilty party. A 17th century French explorer in Madagascar described enormous animals with a "human" face that terrified the natives and it is possible that giant lemurs may yet be found in the dense forests of the interior. The sites from which the bones were collected are marsh and lacustrine deposits and are all superficial; an old report states that "white pulpy matter" came out of one "extinct" lemur's skull. Many of the bones have a suspiciously recent appearance and have been subjected to nitrogen analysis. Bones from one site contained 2.6 per cent nitrogen compared with less than 1 per cent for those from two other localities, a result that suggests that the bones are very recent, at least in this case. Their absolute age is to be determined by carbon-14, so wether Megaladapis is a "living fossil" should soon be determined.
Comments: While I think that it is possible that a small giant lemur population still exists, the evidence seems slim.
The nitrogen analysis could have been skewed by the high amounts of nitrogen in marshes, and the "white pulpy matter" in the lemur's skull could just be due to the unusual preservation effects of marshes or the semi-preserved remains of the animal's brain. Humans and animals in relatively well-preserved states have been excavated from marshes after over thousands of years of interment, so the remains described above do not necessarily imply a recent origin. I do not know if the carbon-14 analysis was in fact done, but the fact that no more on these remains has been publicized probably indicates that any C-14 results showed a normal age.
Native legends and reports of giant lemurs surviving in Madagascar are known, but it hard to say whether these stories represent actual modern sightings or folkloric memories. Considering the late arrival of humans to Madagascar, it is very possible that Pleistocene megafauna (the extinction of which has been attributed to overkill by humans) such as the giant lemur could have survived at least until recent times, possibly being killed off only a few hundred years ago. As for current existence, it's anyone's guess.