What model is your gyro?

Typically, the gyro is mount to the side opposite the sticker/label where the input axis is parallel to the main rotor shaft (YAW axis of heli). If you drew a line through the gyro entering the mounting side and exiting the label/sticker side ... this "line" would be the input axis. Usually, there is some sort of symbol indicating this on the gyro. The gyro "senses" rotational acceleration when it is rotated around this axis. So if this axis is in line with the helis YAW axis, the gyro will "sense" the helis YAW rotation and compensate with appropriate t/r servo response.

If the gyro input axis was mounted inline with the Roll axis of the heli ( " ... writing facing tail of heli ... " ), it would sense Roll rotation and then input corrections to the t/r servo ... uhhhh ... not quit right is it??

Does your gyro have a Normal/Reverse switch setting on it?? This switch being in the wrong setting can cause the "death spin" you speak of (among other things). Did you perform a gyro phasing test to see if the gyro is moving the servo correctly for the heli direction sensed??