I felt terribly sorry about my friend's father's sudden death.
Literal
Friend [possessive-の] father [subject-が] suddenly-died [nominalizer-の] [object-を] greatly pitifully thought.
気の毒に思う ('to think pitifully') is the standard expression for feeling sorry about someone's misfortune — deeper and more empathetic than 残念に思う. 急死する is a blunt kango compound for sudden death. The nominalized clause 父親が急死したの becomes the object of 思った via を.