A Fairy Tale Gone Wrong

He was a great actor and a doting father. But in his final days Heath Ledger also struggled with drugs and demons – which ultimately tore apart the family that might have saved him

Originally posted Thursday January 31, 2008 12:00 PM EST

"They wanted to stay together, but they just couldn't," a friend says of Ledger and Williams (at a basketball game in '06). Photo by: Lucy Nicholson / Landov

To their neighbors in Brooklyn's cozy Boerum Hill, Heath Ledger and Michelle Williams were just glamorous versions of people everybody knew: a funky young couple living in a renovated row house who adored their little girl. Last summer, the pair of low-key movie stars happily snapped pictures of then-1-year-old Matilda as she was fitted for her first pair of shoes: Mary Janes with tiny Velcro straps. "She was curious about what was on her feet, and she was holding on to the benches to stand up," recalls salesman Bobby Moscovici. "And Heath and Michelle were just so happy and proud." For a pair who dreaded the red carpet, making memories like those in Brooklyn made it all worthwhile. "We have a very, very sweet life there," Michelle Williams told PEOPLE in 2005. "The thing I hope the most is that it stays the way it is."

That sweet life is gone now – replaced by mourners and paparazzi crowding the sidewalk outside the place they once called home. A day after the mysterious death of 28-year-old Heath Ledger on Jan. 22, a distraught Williams – who split from the actor late last year – and her daughter made the sad trip back to Brooklyn. There, Williams, 27, was comforted by her mother, Carla, and other supporters, who tried to shield her from photographers and shuttled in deliveries of food. On Jan. 28 Williams joined Ledger's family, in from Australia, and his former girlfriend, the actress Naomi Watts, at a private memorial service in Los Angeles. The service was a prelude to Ledger's funeral, set for early February in his native Perth. "You can't even imagine what Michelle is going through . . . she is so heartbroken," says a Williams pal. "It's one thing to lose someone so close to her, but the fact that she lost Matilda's father is crushing. Her family is getting her through this."

Investigators are still awaiting the results of toxicology tests that should show if any of the prescription sleeping aids and anti-anxiety pills found in Ledger's apartment were a factor in his death. But many who spent time with him in the last months of his life paint a portrait of man whose demons drove him away from the family he loved and into a lonely, nomadic life of insomnia, casual affairs and, according to several sources, serious drug use. These sources tell PEOPLE Ledger was known to use cocaine, and that his behavior ultimately destroyed his relationship with Williams. "Heath's drug use was something that affected them profoundly," says a source close to Williams. "Michelle didn't want their daughter around that. She was very clear that Heath loved his daughter and was a good father." But "she couldn't always rely on him." This conflict over his drug use and its effect on his relationship with his family, says another source, had left Ledger distraught and physically "a mess."