The Talmud [Shabbat 152b] relates the following discussion regarding the body's return to dust after leaving this world:
"There were grave-diggers who dug in the earth belonging to Rav Nachman and were rebuked by Rav Achai bar Yashia (whose grave the diggers disturbed). They came and said to Rav Nachman: "We were rebuked by a dead man".
Rav Nachman went there and asked him: "Who are you, master?"
He responded: "I am Achai bar Yashia".
"Has not Rav Mari said that "In the future, the bodies of the righteous will return unto dust?" said Rabbi Nachman (and why therefore is your body preserved?).
"Who is Mari? I know him not" said the dead one.
Rav Nachman replied "But it is said that when the dust will return to the earth as it was..."
The dead one responded "He who read with you Kohelet did not, however, read with you Mishlei, where it is written "But jealousy is the rottenness of the bones" which means that only he who has jealousy in his heart, his bones shall rot after death."
Then Rav Nachman tried to feel the dead body's substance and he found it to be real. Rav Nachman then said to him: "Let the master arise and go to his home." The dead one responded saying "You show that you have not even read the Prophets, for it is written "And you shall know that I am the Lord, when I open your graves and when I cause you to come out of your graves, O my people."
"But" said Rav Nachman, "it is written "For dust you are, and unto dust shall you return".
Then Rav Achai explained to him, saying "This is meant for one moment before the final resurrection of the dead (that all dead, including tzadikim, will return to dust).
The Rif says that since the last verse mentioned was told to Adam Harishon, it applies to everybody, whether they are tzadikim or not, for everyone is a descendent of Adam. The Maharsha explains that the return of every body to dust is necessary, so every body will be recreated from nothing at the time of resurrection, comparable to the original creation of man.
The Lubavitcher Rebbe's Commentary: Why is it so important to return to dust and to be recreated at the time of resurrection?
Creation, and the soul's descent into the body, were both intended for the purpose of elevating the body and the vital soul, and through them the entire world. Moreover, this objective is reached primarily through the mitzvot involving action, inasmuch as these mitzvot are performed by the body. The body hosts and serves the neshama. The soul, being so spiritual, needs the body to perform mitzvot in a physical form. [See Tanya Ch 37]
When the neshama leaves the body, the dead person cannot do anymore mitzvot since all the mitzvot are associated with something material. Hence, in Heaven the souls can study Torah in a spiritual form but cannot perform any of its commandments [Berachot 17a]. The body then serves no more purpose so it disintegrates.
A similar idea can be understood from the analogy found in Rashi [Devarim 10:7] between the breaking of the tablets (of the Ten Commandments) and the death of tzaddikim. The Ten commandments were engraved in stone by Hashem. When Moshe came down from Mt Sinai and saw the golden calf that the Jews had made, the letters flew away [see Pesachim 87b] and the stones became too heavy for Moshe to carry. Consequently, they fell from his hands and broke. The letters are comparable to the soul and the stone to the body which hosts it. When the letters flew away, the stones served no more purpose, hence they shattered.
The life of a tzaddik is not a physical one but rather a spiritual one [Tanya Igeret Hakkodesh Ch 27]. His body is as holy as his neshama. He elevates and sanctifies his body and all the physical world around him. Even after his neshama leaves this earth, his body remains holy, so it remains intact. [Eliyahu Hanavi elevated his body to the point that it was comparable to the sanctity of his soul. Therefore, he was not buried but he ascended to the sky. The gematria of Eliyahu is 52, equal to the value of the Hebrew word "beheima" which means animal. He sanctified the animalistic part of his being (ie his body) to transform it into Eliyahu - G-dliness]
Why then is it necessary for Tzaddikim to return to dust even for a moment before resurrection?
The Admur Hazaken explains this through a parable [Torah Ohr]. In order to pick up a house, it must be lifted from the bottom. If the house is picked up from the top, only the top will be lifted and the bottom part will remain below.
Every creature is composed of four basic elements, namely fire, water, air and dust [see Tanya end of Ch 1]. By returning to dust, the tzadik elevates the lost sparks of holiness found in the lowest of these elements, completing the elevation of all parts of his being. [The Baal Shem Tov said that he could have ascended to heaven like Eliyahu HaNavi did, but he wanted to return to dust so he could elevate the other basic components of his being]
Nevertheless, there is a way to avoid the need to return to dust, even for a moment. We say in our prayers [Liturgy, end of the Shemonei Esrei prayer] "My soul should be as (humble as) dust for all". By annulling ourselves with humility towards others, we are fulfilling the verse of "and you shall return to dust" in a spiritual manner. Then when Moshiach comes during our lifetime, we will be able to live an eternal life without a moment of interruption.
Source: Written by the students of Seminary Bais Menachem Montreal, Canada and based on the Sichos of 20 Av 5735 Ch. 3 Acharei-Kedoshim 5724 Ch. and Maamar Ze Yitnu 5748