Danny Casolaro liked hanging out in bars, nursing along a beer. He liked pretty women. He liked Tom Waits and Randy Newman. He liked Hemingway. But most of all, perhaps, he liked his friends.

"You're going to find 50 people who come up to you and say, 'I was his best friend.' That's how Danny made people feel," a friend said a few days after Casolaro's body was found in a Martinsburg, W. Va., hotel.

Ann Klenk says Casolaro "could make a Friday night seem like New Year's Eve." A few months ago, she remembers, Casolaro met her for a drink at Duke Zeibert's. She had recently turned 40; she was depressed. She went to the restroom, she says. "When I came back ... Danny had his back to me, with his arms raised like a conductor. He turned around and gave me a little wink and he led everyone singing 'Happy Birthday.' I just stood there."

Afterward, she pointed out that her birthday had been several weeks earlier. "He said, 'Ann, every day should be your birthday.' "

What happened to Danny Casolaro? Did this freelance reporter become so disheartened in pursuit of the biggest story of his life -- a story that struck even one of his best friends as improbable -- that he retreated to a hotel room miles from home, got into a bathtub and slashed his arms as many as 12 times? Or was he murdered because he knew too much about a scandal that reached to the highest levels of government?

Perhaps no one will ever know with any certainty. Martinsburg authorities initially ruled the death a suicide, and their investigation has so far yielded no evidence of foul play. They continue to examine forensic evidence and Casolaro's psychological profile. An autopsy report released yesterday said he had traces of an antidepressant and a prescription painkiller in his system. A bottle of painkilling medication, prescribed to Casolaro after root canal work in 1988, was found in his room. Casolaro's brother, a doctor, said that as far as he knew, Danny Casolaro was never treated for depression.

Friends are urging the family to hire a private detective.

Casolaro had told people he was going to West Virginia to meet a source. He said he was about to break a story that he had been pursuing for more than a year, a story about a global conspiracy that tied together several scandals and alleged scandals -- the Iran-contra affair, the Bank of Credit and Commerce International, the Justice Department's alleged theft of software from a computer company called Inslaw.

On Aug. 10, two days after he arrived, his body was found by hotel employees -- an apparent suicide. There was a brief note, which authorities have refused to release even to his family. He was embalmed -- on a Sunday -- with haste that later seemed peculiar to relatives, who had not yet been notified. Local authorities said they followed routine procedures.

In the ensuing weeks, friends and family still say they cannot believe Casolaro, 44, would kill himself -- even though several concede that suicide may be sudden, unpredictable, inexplicable. Arthur Weinfield, a retired staff officer at the National Security Agency and a friend of the Casolaro family for 28 years, has considered the circumstances again and again.

"I come out with 100 different answers and I've stopped playing that game with myself," says Weinfield, 59. "But I can say that the Danny Casolaro who was my best, beloved friend, who I grieve for very much, was not a person that would have committed suicide."

"It's not like we're all in mass denial," says Klenk, a television producer. "It's the fact that we knew him for so long. And you'd think there would be something, some crack in that exterior." She finds suicide by razor to be most improbable. "He would have jumped off the Empire State Building, with firecrackers," she says.

Wendy Weaver, who dated Casolaro for seven years and at one time lived with him, concurs. "Danny hated the sight of blood," she says matter-of-factly. "Additionally, he didn't like to be seen naked. To be found in a tub, naked -- that's not Danny."

An Unconventional Career

By many conventional measures, Danny Casolaro was not a success. His career in journalism was undistinguished, his attempt at entrepreneurship didn't pay off. Being in debt was more the rule than the exception. He published one novel -- which he apparently paid a vanity press to print.

His resume says he "participated in some of the most important investigative efforts of the last 20 years, for newspapers and scientific journals." But the record is thin. His stories appeared in places like Home & Auto, El Dorado News Times, Media Horizons.

Casolaro grew up in Northern Virginia. His father was an obstetrician. Casolaro went mostly to Catholic schools and graduated from Providence College in 1968.

He came from a family of seven children, although one brother, born with a heart defect, died at the age of 1. Another sister, Lisa, went off to Haight-Ashbury in the days of the Summer of Love and wound up dead from drugs at 17.

"It's actually that issue that makes the question of Danny committing suicide almost impossible," says brother Tony Casolaro. "... He was sort of angry at her. The effect was so damaging."

Casolaro freelanced for several years, working out of his home. Then he acquired a small company that published specialized newsletters, including Computer Daily. Weaver says Casolaro was the only writer.

Casolaro sold the company in 1989. Weaver, who works in advertising, says Casolaro "wasn't the best businessman" and didn't do as well from the sale as he had hoped. The buyer was "a sharp negotiator. Danny couldn't compete with that," she says. Casolaro worked for the new owners for a brief period but left. Weaver says he had difficulty adjusting to being an employee and was forced out.

Casolaro searched for a job after he left the trade newsletters, Weaver says. He prepared a resume that described his interest in "a challenging and rewarding Executive position managing a media operation." He didn't find a job, but he did begin, on his own, to investigate the Inslaw case. It was to become an obsession.

The story began with Inslaw's allegation that the Justice Department had stolen software from it. Casolaro began to develop his "octopus" conspiracy theory about a crime cabal with global reach. Friends say he devoted most of his time to the story.

Casolaro is not the only writer who became intrigued by the notion of a massive conspiracy. Another pursuing a similar story reports that Casolaro called him in early June and, perhaps to scare him off, said he had a book and even a movie deal wrapped up.

Nothing could have been further from the truth, according to Roger Donald, the top editor at Little, Brown books, to whom Casolaro submitted his proposal. "I'll tell you this," Donald says. "Anybody who killed him over that manuscript made a mistake. That was not a book that was going to be published."

Six to nine months ago, Donald says, he met with Casolaro but found that his book proposal was hyperbolic and "very unprofessional." A couple of weeks before his death, Casolaro called and said, "I've really got the whole thing together now," the editor says. But Casolaro's revised proposal showed no improvement, Donald says.

"My final remark to him was, 'I could write this outline. I could say, there have been the following crimes, and list them.' ... Maybe he was onto something, but he sure as hell couldn't express it."

'He Loved His Friends'

While Casolaro failed professionally, he succeeded socially. Those who knew him say he had a knack for making them feel cherished and special. "I would have no problem saying Danny was not as learned as I or as bright as I," Arthur Weinfield says. "But Danny had a certain quality about him. People liked to orbit around that quality."

Weaver thinks that quality was empathy. "He was one of the most compassionate men I've ever known, the most caring," she says. "He was always upbeat."

Klenk remembers Casolaro volunteered to escort her to her high school reunion, where a couple of expectant parents were so taken with him after one meeting that they later named their baby after him.

Many friends have memories of him revolving around birthdays or holidays, when Casolaro made a point of inviting those who might be lonely to his family's house. He loved surprises and jokes, but never at someone else's expense.

Once, Klenk says, she brought a box of chocolates to his mother's house as a Christmas gift. When Casolaro's mother tried to sample a candy, Klenk says, she couldn't pry it out of the box. Klenk discovered, to her embarrassment, that she had bought a plastic display. Casolaro stepped in. "He said, 'Ann, you had to do it again. Here it's Christmas and you had to bring your gag box of chocolates.' "

"Every time I was with Danny and I started to talk about someone else, he didn't say 'Don't do that,' but I became aware of the fact that Danny didn't talk that way about other people, and I'd better stop," Weinfield says.

Friends acknowledge that Casolaro was apt to exaggerate about their achievements, a trait they attribute to generosity of spirit rather than an attempt at self-glorification. "He loved his friends," Klenk says. "He made us larger than life."

Some of Casolaro's kindliness comes across in a song he wrote about an old man, which a friend sang at his funeral service:

He lost his battles and lost the war and then he came back for more ...

'If you want to please my ghost,' he said, 'after I've gone away,

'Then forgive some lonely sinner and wink your eye at a homely girl.'

The 'Octopus' Obsession

During the 10 years that Casolaro was married, he and his wife, Terrill, lived on a few acres in Fairfax and even kept Arabian horses for a time, though they never had much money. "Danny collected people that were interested in music and writing," Weinfield says. " ... Success to them was never a matter of artifacts, of how much they could accumulate."

Casolaro and his wife kept "a kind of open house where people could drop in and talk and drink beer and wine," Weinfield says. Casolaro entertained modestly. "He'd get a couple of chickens from the Giant and some cheese ... He had a knack for finding a pretty good bottle of wine for $4, $5, $6."

The group smoked cigarettes ferociously but Weinfield says Casolaro said he had never used drugs. "He never even smoked a joint that I know of," Weaver agrees. Casolaro "liked his Budweiser," she says. Friends agree that he did not drink to excess, although witnesses in Martinsburg said he drank heavily in the days immediately before his death. The autopsy report said there was no alcohol in his blood at the time of his death.

Weaver says Casolaro "was very much in love" with his wife. Longtime friend Joe Lane says Casolaro's wife, "the prettiest lady I've ever seen in my life," became suspicious that Casolaro was unfaithful to her. The breakup, which took place about 10 years ago, turned ugly, he says. Casolaro's ex-wife, now living in Florida, couldn't be reached for comment.

Casolaro was left with his child -- then about 10 years old. Friends and relatives say Casolaro was close to his son, named Joseph Daniel but called "Trey." Now in his early twenties, Trey lives in Colorado, where he skis and does carpentry. Efforts to reach him were also unsuccessful.

Weaver says she started dating Casolaro in 1985 after they met at a party and he followed up by sending roses anonymously. "Possibly yours," the card read. She was charmed. She says she moved in with Casolaro but left a couple of years ago because he wouldn't make a commitment. "He just loved beautiful women," she says. Nonetheless, the two continued to date.

Casolaro changed after he got wrapped up in his "octopus" theory, friends say. Lane remembers that Casolaro was "more reserved" than usual when he visited Lane in Richmond last June.

"He said, 'Joe, I am scared.' ... He said, 'I have been getting threatening calls.' I said, 'Why don't you get off this story?' He says, 'I can't, Joe. It's too deep. It's bigger than anything I've ever encountered in my life.' ... He says, 'Joe, this is bigger than anything I've ever dreamed of.' "

'An Oncoming Train'

But meanwhile, Casolaro was running out of money. In a letter to his agent, Casolaro had discussed his debts and written: "In September, I'll be looking into the face of an oncoming train."

Casolaro's friend Ben Mason says he had talked to Casolaro about money problems a few weeks before his death. "He had some normal financial {difficulties} but they were nothing dire, nothing dire at all," Mason says. "He was brave and he was trusting and he was an artist."

"Danny would not off himself over money worries," Weinfield says.

"Danny always had money problems," Weaver says dismissively. But she says he was always open-handed. A few years ago, she remembers, he told Weaver that he had passed a homeless woman in front of the Madison Hotel here. After an argument with a clerk, he got the woman a room and gave her $150.

At the memorial service, a friend sang "I Adore You Today," a song written by Casolaro:

Don't worry about those bills,

We'll climb a thousand hills,

I'm a millionaire,

Don't have a dime or care

Because I adore you today.

Another 'Foucault's Pendulum'?

Weinfield, the retired National Security Agency officer, says he always doubted Casolaro's "octopus" theory. "Danny would call me and say he had this or that deposition, this or that piece of information. He would run it by me and I would say, 'I'm skeptical about the quality of the source and the validity of the information.' "

Casolaro might show him, say, a deposition from a Pentagon official. "I thought it was a lot of garbage," says Weinfield, who had worked in the Pentagon.

One option that Casolaro considered, according to Weinfield, was fictionalizing the story. In a conversation about a month ago, he remembers, Casolaro was still optimistic about his chances of succeeding in one form or another.

Weinfield says he worried that Casolaro might get into trouble because of his mistaken belief in the story. He urged Casolaro to read "Foucault's Pendulum," by Umberto Eco. "One of the thematic elements is that the protagonists invent this {fictitious} conspiracy ... and it turns out there is a group of nuts out there who had a disposition to believe this thing," he says.

The book ends when that group kills the protagonists who invented the conspiracy. "I told Danny, 'This is what it seems to me you're involved with... . You're helping to create a conspiracy where there is none.' "

Staff writer Robert O'Harrow Jr. contributed to this story.