WHY did he think that the corpse was Saunders? The corpse, although not really burned at the time they found it, was fresh enough to say that it was burned at least sometime in the evening.
Since Luo Yan realized that and since he confirmed that the corpse didn't belong to William Harcourt, he had been wondering about its identity. He first thought that it could be some poor sod who was simply in the wrong place and in the wrong time. Maybe it was some stranger who got lost in this mountain and William's partner or partners abducted, killed, and burned them.
But somehow, Luo Yan doubted if William Harcourt would actually resort to nonsensical murder just for revenge. If he went along with that idea, then that meant that the corpse would be one of the people the old man wanted to take revenge on.