Does 'sleep' in the Bible mean the soul is unconscious after death?

No — and the Gospel of John makes this explicit so clearly that the argument shouldn't be necessary.

When Lazarus dies, Jesus tells his disciples "Our friend Lazarus has fallen asleep (kekoimētai, from koimao, G2837), but I go to awaken him" (John 11:11). The disciples think this is good news — if he's resting, he'll recover. So Jesus removes all ambiguity in verse 14: "Lazarus has died." The text defines its own metaphor. "Fallen asleep" means "died." It's a description of the body lying still — the outward appearance, not the inner state.

This is how Paul uses the same word in 1 Thessalonians 4, where he writes about "those who are asleep" three times, then in verse 16 switches to the plain word nekros (νεκρός, G3498) — "the dead in Christ." He uses both words for the same group, one metaphorically and one literally. The sleep language is the image; "the dead" is the reality it pictures.

What the sleep metaphor describes is the body — still, lying down, waiting for waking. Daniel 12:2 says "many of those who sleep in the dust of the ground will awake." The picture is resurrection: the body in the ground is like a sleeper who will rise. That's not a claim about the soul being unconscious. Ecclesiastes 12:7 is specific about where the parts go: "the dust returns to the earth, and the spirit returns to God who gave it." The body sleeps; the spirit returns to God.

Paul's statement in 2 Corinthians 5:8 — "absent from the body, present with the Lord" — pairs departure and arrival as a single event with no gap. The sleep imagery says something about the body. It says nothing about a waiting soul.

Read the full study on the intermediate state