O'Sullivan was supposed to have appeared in Hastings District Court on Monday, but failed to appear and a warrant has been issued for his arrest.
Concerns for Paludet, who had been sleeping in his vehicle, were raised when locals noticed a build-up of rubbish and his station wagon seemingly abandoned, leading to a call to police the next afternoon.
Detective Senior Sergeant Martin James, of Hawke's Bay CIB, said public vigilance had been at the forefront of the inquiry and police have thanked the Haumoana community for their help in the investigation.
"If I can say anything positive about this, it's the amount of feedback and information that we got from the public was absolutely outstanding.
"Clearly people are quite observant and taking note of vehicles, people's actions, behaviour and descriptions."
Paludet's family had previously said they were very grateful for the support they had received from the Hawke's Bay community.
James said police were still waiting for full post-mortem results, which could take some months.
Paludet's death has been referred to the coroner .