COVER SNEAK PEEK: What Happened to Caylee?

Thursday July 31, 2008 10:00 AM EDT

COVER SNEAK PEEK: What Happened to Caylee?

Investigators say that Orlando mother Casey Anthony has entangled herself in a bizarre web of lies over the disappearance of her 2-year-old daughter Caylee, PEOPLE reports in its latest cover story, on sale Friday.

As Casey, 22, sits in jail, authorities are checking on several reported sightings of Caylee, including one at a diner in Georgia, and everyone involved is operating on the hope that the sunny little girl who loves music and stories is still alive.

Yet even Casey's lawyer Jose Baez concedes that such optimism may not be warranted.

"There is circumstantial evidence of a possible homicide," he said at one court hearing. Baez maintains that if Casey were to be released from jail she could assist in the search for Caylee. But authorities aren't buying that.

For the full story, including the list of lies Casey told investigators about the case and her daughter, pick up this week's PEOPLE, on newsstands Friday

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