If I think I understand what you're saying, I've seen this happen a couple times myself. It's a glitch. What happens is his powerups actually drop, but in another water spot on the map. And chances are you won't be able to run to get them in time either. I don't know what triggers it. I've killed him plenty of times with a sickle or normal wepaons and not had this happen to me. but when this does happen, you're game is screwed up because every time you kill george the drops show up somewhere else. Might as well restart the game at that point.
This happened again to me this weekend. I wrecked George with the Krause Refibulator + Sickle combo by the water area next to Stamina-Up. Then when he died, I heard a Samantha laugh, and the two drops were not there. Having seen this before, I raced to the starting area to see the two drops disappear in the middle of the water, where George originally spawns, before I could reach them.
Next time I killed George was with a different weapon, on land, and the drop appeared as normal.
Then the third time he died (I believe from a flopper splash), the drops relocated the starting area water again.
Then..... I rage quit. :roll: