How many Israelites died in Egypt?

 Rashi on Beshalach 13:18 cites a Midrash  for his second take on the word chamushim. Chazal  read the word as an indication of a much diminished population, cut down to one fifth.

וחמשים: אין חמושים אלא מזויינים. לפי שהסיבן במדבר גרם להם שעלו חמושים, שאלו הסיבן דרך יישוב לא היו מחומשים להם כל מה שצריכין, אלא כאדם שעובר ממקום למקום ובדעתו לקנות שם מה שיצטרך, אבל כשהוא פורש למדבר צריך לזמן לו כל הצורך, ומקרא זה לא נכתב כי אם לשבר את האוזן, שלא תתמה במלחמת עמלק ובמלחמות סיחון ועוג ומדין, מהיכן היו להם כלי זיין שהכום ישראל בחרב. וכן הוא אומר (יהושע א יד) ואתם תעברו חמושים. וכן תרגם אונקלוס מזרזין, כמו (בראשית יד יד) וירק את חניכיו וזריז. דבר אחר חמושים אחד מחמשה יצאו, וארבעה חלקים מתו בשלשת ימי אפילה:

armed: Heb. חִמֻשִׁים וַחִמֻשִׁים [in this context] can only mean “armed.” (Since He led them around in the desert [circuitously], He caused them to go up armed, for if He had led them around through civilization, they would not have [had to] provide for themselves with everything that they needed, but only [part,] like a person who travels from place to place and intends to purchase there whatever he will need. But if he travels a long distance into a desert, he must prepare all his necessities for himself. This verse was written only to clarify the matter, so you should not wonder where they got weapons in the war with Amalek and in the wars with Sihon and Og and Midian, for the Israelites smote them with the point of the sword.) [In an old Rashi]) And similarly [Scripture] says: “and you shall cross over armed (חִמֻשִׁים)” (Josh. 1:14). And so too Onkelos rendered מְזָרְזִין just as he rendered: “and he armed (וְזָרֵיז) his trained men” (Gen. 14:14). Another interpretation: חִמֻשִׁים means “divided by five,” [meaning] that one out of five (חִמִֹשָה) [Israelites] went out, and four fifths [lit., parts of the people] died during the three days of darkness.
 
In Maayan Beis Hashoevai, Rabbi Schwab brings up a difficulty with this take on a literal level that grows when one refers to the Mechilta source that extends the possibility to not only one fifth but even on 50th and 1/500th!  As he says, [my translation]:

Certainly, this is something very surprising, for according to that take, we'd find that close to 30 million died or three hundred million from the children of Israel before the Exodus. And it's also surprising that according to all the views, at least a few million were lost. That would mean this was a terrible tragedy and a  greater ma'aka than all the ones inflicted on the Egyptians.

The approach we can take it based what Rashi says (Berishis 4:10) "Kol damey achicha tzoakim min ha'adama" as Chazal (Sanhedrin 37b) explained "damey achicha" [the bloods of your brother] refers to his own blood and that of his would-be descendants. Along these lines, we can say in this context that in truth only a few individuals died, for there were among the children of Israel some utterly wicked people that were not worthy of the redemption, and they died during the three days of afela. Had they remained alive, they would given birth to several million people over the course of generations. It was on this point that the ba'aley Midrash argued how to calculate the the total number, if it would be four times 600,000 or 49 times 600,000 or 499 times that number. (It's possible the difference of opinion is due to at what point the count ends: if it is at the point of the Temple being built or until the end of all generations or to some other point in time).

 A clear proof to our take comes from Rashi's observation that they died in the three days of afela.. Why didn't they die at another time? The answer is that HKB"H did not want the Egyptians to see that members of the children of Israel died. That's why they both died and were buried at the time of afela, and the Egyptians were not even aware of the loss. In light of this, if we were to read the Midrash literally -- that a significant majority died at the time -- it's impossible to say that the Egyptians would not have realized that such a tremendous loss had occurred. Accordingly, it is clear that it had to have happened as we explained; only a few people died, and their loss was noticed within the population. A further illustration, if we say that the accursed Nazis ym"Sh murdered 6 million, we can calculate that in fact they killed 20 million because in the course of 50 years, all those killed could have multiplied with many children and grandchildren. And that number of our dead rises with each year, as their blood and the blood of their descendants cry out to Hashem from the gournd, and He yinkom le'eyneinu nikmath dam avadav hashafuch.