Steve-
These are complex issues, and you need an entertainment attorney to sort out the details, but the following are a few general comments in response to your questions:

1.) "is there a possibility for a lawsuit even if i let the publisher know that i can't reach the cowriter?"
THERE IS ALWAYS THE POSSIBILITY OF A LAWSUIT. THIS COUNTRY IS SUIT CRAZY. THERE IS NOTHING YOU CAN DO TO PREVENT A LAWSUIT. HOWEVER, TAKING THE RIGHT STEPS TO SHOW THAT YOU ACKNOWLEDGED THE CO-WRITER'S INTERESTS WILL GO A LONG WAY TOWARD RESOLVING THE LAWSUIT IF ONE ARISES LATER.
KEEP IN MIND THAT CO-AUTHORS EACH OWN AN UNDIVIDED EQUAL INTEREST IN THE COMPOSITION (UNLESS THERE IS A WRITTEN AGREEMENT THAT ESTABLISHES A DIFFERENT PERCENTAGE OF OWNERSHIP). THIS MEANS THAT EACH CO-AUTHOR HAS THE RIGHT TO GRANT NON-EXCLUSIVE LICENSES TO EXPLOIT THE WORK (YOU DON'T NEED THE CONSENT OF THE CO-AUTHOR TO GRANT THE LICENSE UNLESS THERE IS SOME FURTHER WRITTEN AGREEMENT BETWEEN THE AUTHORS).

2.) "the money is waiting on the cowriter, his noame is on the albulm cover, but he didn't sign a release for his part of the music?"
NOT SURE WHAT YOU MEAN HERE. HE DOESN'T HAVE TO SIGN A RELEASE IF THE COMPOSITION IS BEING EXPLOITED IN A NON-EXCLUSIVE MANNER. IT'S GOOD THAT HIS NAME IS ON IT BECAUSE UNDER THE LANHAM ACT THERE IS A PROHIBITION AGAINST FALSELY REPRESENTING THE SOURCE. THERE IS CASE LAW THAT SAYS A SONGWRITING CREDIT ON AN ALBUM IS A FALSE DESIGNATION OF ORIGIN IF IT FAILS TO ATTRIBUTE AUTHORSHIP TO ALL OF THE AUTHORS (BARRING AN AGREEMENT AMONG THE AUTHORS TO DO OTHERWISE).
AS TO THE MONEY THAT IS "WAITING" CO-AUTHORS HAVE A LEGAL DUTY TO ACCOUNT TO EACH OTHER FOR EXPLOITING THE SONG. KEEP IN MIND THAT IN CERTAIN SITUATIONS, THE STATE MAY HAVE A LAW THAT REQUIRES ABANDONED FUNDS TO BE TURNED OVER TO THE STATE AFTER A CERTAIN PERIOD OF TIME. AGAIN, YOU WILL NEED AN ATTORNEY TO SORT THIS OUT FOR YOU.

HOPE THIS HELPS