First of two parts

The corpse, reposing on its back near the water's edge, was that of an adult male, freshly butchered by the looks of things.

Standing over the body, Detective Robert Bjorklund of the Dallas County Sheriff's Department noted very little blood. Whoever did it killed him elsewhere, using a blade to make him a John Doe. The dead man's head was nowhere to be found. His hands were missing, too.

"On October 2, 1995 at approximately 3:30 p.m., our Department . . . recovered the body of a nude white male," Bjorklund wrote in a bulletin. "The body was found . . . in a wooded area about 50 feet from the riverbank of the East Fork Trinity River."

For a long time, there wasn't much more to say. Except for his approximate age (about 40) and estimated height and weight when he still had hands and a head, the victim was a mystery in a morgue drawer.

Until last winter, when the dead man told a tale.

After detectives finally confirmed his name in January, the story behind his killing began to take shape--a tortuous story of greed and revenge, abduction and murder, and a half-million dollars in stolen gold.

It's an unlovely tale, at turns tragic and darkly absurd, about a once-famous woman, a '60s iconoclast, Madalyn Murray O'Hair. She was America's best-known atheist, its leading public blasphemer, a litigious foe of God and religion. Four years ago, she and two family members vanished from their Austin home. Now authorities say they're convinced the three were kidnapped, slain and disposed of--murdered just as surely as the victim in Dallas County.

Madalyn Murray O'Hair, The Famous Atheist: In a 1960 lawsuit she claimed public-school prayer was unconstitutional, and the Supreme Court agreed in a landmark ruling. To some, she was an inspiration, a doughty homemaker bellowing the stifled sentiments of Americans who felt oppressed by religious convention. Yet to others in that Cold War era, she was anathema, a subversive, the Antichrist come to rot the nation's spiritual foundation--and for years she thrived on their enmity, exploited it, made ungodliness her livelihood.

Then one day in 1995, at age 76, she seemed to drop off the Earth. Her son Jon Garth Murray, 40, and adopted daughter Robin Murray-O'Hair, 30, disappeared with her. So did a fortune in gold coins.

A mystery, like the corpse by the river.

Until the corpse got a name.

"The most hated woman in America," she proclaimed herself in the '60s. Life magazine headlined the quote in a 1964 profile. But that was an anxious America on the brink of tumultuous change. By the time Madalyn Murray O'Hair vanished, the country had long got over her.

She was obese, slowed by diabetes and a bad heart--a cultural leftover, dimly recalled. She could, and did, still rail and cuss at "the Christers" and at God-fearing piety in all its forms; she was as churlish and foul-mouthed and contentious as ever. But almost no one paid attention anymore. And when suddenly one morning she was gone, the world just shrugged. Ashes to ashes.

She was working-class Pittsburgh by birth, Madalyn Mays, Presbyterian.

At 22, she eloped. Five years later, in 1946, she had a son. The father was a well-to-do Army officer with whom Madalyn had an affair. She divorced her husband, but the officer, an obedient Catholic, refused to leave his wife. Madalyn took his name anyway, becoming Madalyn Murray, and the boy was baptized William J. Murray III. He runs an evangelical Christian foundation in Virginia now. He goes by Bill.

What begat his mother's anger--her caustic combativeness in general, and in particular the sneering contempt for religion that made her famous--may never be clear. Bill Murray points to the poverty she endured after his birth. "Mother came to hate the Catholic church and the pope for preventing her marriage to a man of considerable wealth," he wrote in his 1982 memoir.

In Baltimore, where they landed in the early '50s, she had another son by another man. Jon Garth Murray, she named him.

One morning in 1960, while enrolling Bill in junior high, Madalyn Murray heard students reciting the Lord's Prayer. The school wouldn't excuse Bill from joining in, so she took Baltimore's school board to the Supreme Court--and here her legacy gets tricky. Her lawsuit was merged with a case from Pennsylvania already on the docket, and it was the Pennsylvania case that led the court to ban public-school prayer in 1963. Madalyn Murray wasn't the only plaintiff in that historic ruling, nor was she even essential. She was merely the litigant with the loudest mouth. And it made her a celebrity.

"In reality my mother did not create the times, the times created her," Bill Murray wrote recently on his Web site. While the other plaintiff, a Unitarian, quietly went home to Philadelphia, Madalyn Murray set about ridiculing mainstream America's inviolate beliefs. In lectures and debates, she inveighed against religion. "We find the Bible to be nauseating, historically inaccurate and replete with the ravings of madmen," she told Life. "We find God to be sadistic, brutal and a representation of hatred."

Johnny Carson had her on, Merv Griffin, a dark-haired Phil Donahue on his debut show. There was a late-'60s film documentary, "Mad Madalyn." She became The Famous Atheist, riding the counterculture tide in a muumuu.

Of course Life's readers were appalled. But as Bill Murray wrote, "Every misfit in America was sending my mother letters of praise with a check enclosed."

So began American Atheists Inc., committed to pursuing "the total, absolute separation of government and religion." The tax-exempt organization, with chapters dotting the country, gave Madalyn a comfortable living for years. She was atheist-in-chief, fund-raising whip and financial czar in a crusade for such strict public secularism that she wanted "In God We Trust" removed from U.S. currency. After setting up headquarters in Austin in the late '60s, she married and divorced again, becoming Madalyn Murray O'Hair. By then Bill Murray was a drug-using alcoholic and the single father of a small girl, Robin.

He drifted away from his mother, leaving her with his child, whom Madalyn eventually adopted. Thus her granddaughter became her daughter, Robin Murray-O'Hair, the niece/sister of Jon. For years, Bill Murray wandered in and out of Madalyn's orbit, until the late '70s. "I turned to a Twelve Step Program to stop drinking," he wrote, "and there found my first awareness of a loving God." He became estranged from his family, and on Mother's Day 1980, he declared himself a Christian.

Meanwhile, from 1969--when she successfully pressured NASA to prevent astronaut Buzz Aldrin from taking televised Communion on the moon--through the '70s and into the Reagan era, The Famous Atheist marched to court again and again, battling religious symbolism in the official domain. But God made a comeback. In the '80s, while Madalyn Murray O'Hair partied in Hollywood and wrote speeches for porn publisher Larry Flynt, more and more people returned to church. The nation moved right. American Atheists kept claiming a membership in the high five figures, and O'Hair went on suing the Christers, but by 1990 all her chapters were gone. It was the Christers with their political agendas who were getting the TV time, while O'Hair taped diatribes for cable access. By 1993, her radio show, once on 150 stations, was off the air.

"The last ten years of her life she became even more profane and vulgar as the demons she courted got their final hold on her," wrote Bill Murray, who watched his mother from afar as she slid into obscurity.

O'Hair's obscenity-laced diaries (sold for $12,000 at a tax auction last April) confirm what some of her ex-employees now say: that she considered them idiots--"pimps, whores, hopheads, queers, pinkos, drunks, glue-sniffers and freaks," she wrote. They say she sometimes stalked the halls of her spacious headquarters, berating them. Jon and Robin, socially clueless as adults, were Madalyn's acolytes in the office. Reared in The Famous Atheist's image, they lived with her in a sprawling home in northwest Austin, ate meals with her, vacationed with her--heeled to her like overfed poodles, even when she kicked them.

"The unholy trinity," say people who knew them.

In the months before they disappeared, the three were burdened with legal and financial worries. Contributions to American Atheists had slowed to a trickle. Jon and Robin, accused of misusing donations for personal expenses, were being sued by the IRS for $1.5 million. And in California, a lawsuit accused O'Hair of fraud in her failed bid to gain control of an elderly atheist's $15 million estate.

The rich atheist, James Hervey Johnson, ran a for-profit organization in San Diego that was much wealthier than O'Hair's. After Johnson refused to merge his operation with hers, O'Hair tried to wrest it from him, allegedly by falsely claiming ownership of stock. Johnson's lawyers thwarted her, then hit her with a $7 million lawsuit, threatening to wipe out American Atheists.

As the November 1993 trial date neared, Madalyn, Jon and Robin "were really expecting to lose," says David Travis, who worked for them at the time. "They told us employees not to be surprised if we came to work one day and found the building padlocked." Roy Withers, an attorney for Johnson's estate, alleges that O'Hair ordered her most cherished asset, the American Atheists library, with 25,000-plus volumes, secretly packed and shipped into hiding.

"The whole library just disappeared one weekend and we never saw it again," says Travis, 56, who was a proofreader for O'Hair's newsletter.

There was a mistrial that fall, and a new trial was set for November 1994. Withers alleges that O'Hair continued to conceal and dispose of assets. "They were getting liquid," he says.

The 1994 trial ended in O'Hair's favor--and by then Johnson was dead of cancer. But O'Hair feared his estate would win its appeal, says Travis. One day in March 1995, he says, he mistakenly opened an envelope addressed to Jon Murray in the office mail. He says it was a bank statement from New Zealand Guardian Trust showing an account with nearly $1 million in it.

"I felt betrayed," says Travis, a retired Army sergeant. "It was obvious to me they were planning to disappear."

Five months later, on Aug. 28, 1995, Travis arrived for work and found a fellow employee staring at a typewritten notice on the door of American Atheists headquarters. "The Murray-O'Hair family has been called out of town on an emergency basis," it began. "We do not know how long we will be gone at the time of the writing of this memo."

Travis, among others, figured forever.

"I actually wrote them an indignant letter and sent it to their home address, thinking they'd made some arrangements to get their mail," he says. "I expressed my indignation that they'd abandoned everything they'd worked for.

"But I never heard back."

Despite widespread suspicion that the family had skipped Austin for good, perhaps for a South Seas climate, one of American Atheists' most devoted members refused to believe it. Ellen Johnson, a New Jersey homemaker, was a longtime O'Hair loyalist whom the atheist leader had appointed to her nominal board of directors. In the leader's absence, Johnson took charge of the group and voiced its official position.

"I was the one who kept saying, 'They'll be back! Why wouldn't they be back? Of course they'll be back!' " Johnson, 44, recalls now.

At the big house in northwest Austin, there were clear signs that Madalyn, Jon and Robin had left in an unusual hurry. For one thing, their unfinished breakfasts were still in the kitchen. Yet Johnson got a call from O'Hair early in September, not long after the family's departure, and got calls from Jon and Robin as the month went on--all on Jon's cell phone. The three said they were in San Antonio. They wouldn't say what they were doing, but assured Johnson they were well and would be home eventually.

"People were saying to me, 'Wake up and smell the coffee, kid,' " says Johnson, now president of American Atheists, based in Cranford, N.J. "But I'm thinking to myself, and telling everybody, 'Don't worry, don't worry.' "

The Austin police weren't worried. After receiving a missing-persons report in September 1996 from born-again evangelist Bill Murray in Virginia, detectives told him they could find no persuasive evidence of foul play, and wouldn't spend time and money searching for three adults who appeared to have left town on their own. The only official agency showing an interest in the atheists' whereabouts was the IRS. Suspecting that the family had absconded with tax-exempt funds, an IRS criminal investigator named Edmond J. Martin began a money-laundering probe in February 1997, more than a year after the family was last heard from.

Not until 1998--long after even the most trusting of O'Hair's followers had given up on her coming back--did the tropical-hideaway theory finally give way to the likelihood of homicide. The realization dawned last fall when Dallas County detectives--who knew almost nothing about the missing atheists from Austin, 175 miles to the south--got a tip in a local murder case that had gone unsolved since 1995: the corpse by the river.

The tip was the dead man's name.

The name convinced an array of law-enforcement agencies that The Famous Atheist and her kin weren't lounging on some palm-shaded beach after all, but, like the victim by the Trinity, had been murdered. Suddenly the case of the vanished atheists became an odds-on triple homicide, with evidence pointing to suspects, including a disgruntled ex-employee of American Atheists named David Roland Waters.

Waters, described by people who know him as bright and supremely self-confident, was 45 when he took a job as a typesetter for O'Hair's newsletter in January 1993, having answered a help-wanted ad. "Religious persons may feel uncomfortable," the ad warned, which didn't deter Waters. His Illinois rap sheet shows he had been walking a decidedly unsaintly path for much of his life.

Near Peoria in 1964, at age 17, while on juvenile probation for a burglary, he joined three other teenagers in fatally bludgeoning a 16-year-old boy in a dispute over 50 cents' worth of gasoline. Prosecuted as an adult, he got 30 to 60 years, was paroled in 1976, then imprisoned for assaulting his mother. After serving time for forgery in the '80s, he moved to Florida, then to Austin, where he spotted O'Hair's newspaper ad. She hired him on the morning he showed up for an interview, and a year later promoted him to office manager.

In March and April 1994, however, while Madalyn, Jon and Robin were out of town, Waters took $54,415 from the group's bank accounts. He was charged with theft--although he insisted he had withdrawn the money at Jon Murray's behest.

Waters and a ghostwriter later recounted the incident in an unpublished book about the atheists. The withdrawals occurred during the period when O'Hair allegedly was hiding assets. Waters claimed he had been told to gradually siphon $100,000 from the accounts, keep $15,000 as a fee and stash $85,000 in Murray's office safe. But after making several withdrawals totaling $54,415, Waters said, he got nervous and decided to stop midway through the scheme. He claimed he kept his $15,000 fee and put the remaining $39,415 in the safe.

The atheists then framed Waters for theft by secretly pocketing the money in the safe and accusing him of stealing $54,415, says Waters's lawyer, Patrick Ganne.

An alleged double-cross by the unholy trinity.

Yet what proof did Waters have? He had only his word--the word of a convicted killer and forger. If found guilty of theft at a trial, Ganne says, Waters could have been locked up for life as a habitual offender. So in May 1995--three months before the family disappeared--he pleaded guilty in a deal with prosecutors. He got probation and was ordered to repay American Atheists the full $54,415.

Many months later--after IRS agent Martin's money-related search for the missing atheists turned into a homicide probe by a slew of investigative agencies--Martin filed a 36-page affidavit requesting a search warrant for Waters's apartment. The affidavit details what authorities believe happened to the family.

After the theft charge in 1994, O'Hair excoriated Waters in her newsletter, laying out choice details of his criminal convictions, including the late-'70s assault on his mother, in which Waters had been accused not only of beating her with a broom handle, but of urinating on her. According to Martin's affidavit, Waters fumed, voicing "fantasies of killing Madalyn," of "seeing Madalyn suffer and snipping off her toes." In the summer of 1995, after buying duct tape, rope and handcuffs, the affidavit says, Waters phoned two old buddies in Florida and invited them to Austin.

One of them, Danny Raymond Fry, then 41, was a hard drinker and occasional small-time "con man," according to Martin. His criminal record consisted mainly of drunk-driving arrests.

The other, Gary Paul Karr, then 47, was a harder case, with a record of mayhem dating to the '60s. Karr had just got out of prison, in March 1995, after serving 21 years for two armed robberies and the violent kidnapping of a judge's daughter. He and Waters had done time together in Illinois in the mid-'80s.

By July 1995, Fry and Karr had moved into Waters's Austin apartment.

Although no charges have been filed in the atheists' disappearance--and the suspects deny being involved in it--the search-warrant affidavit alleges what happened next:

"WATERS, KARR and FRY planned and executed the scheme to abduct, kidnap and murder MADALYN MURRAY O'HAIR, JON GARTH MURRAY AND ROBIN MURRAY-O'HAIR for the purpose of stealing" hundreds of thousands of dollars.

In Virginia, Bill Murray read the affidavit and inferred a scenario from the wealth of circumstantial evidence described in it.

On his Web site, he wrote that Madalyn and Robin "were held for almost 30 days, probably tied and gagged, while my brother desperately tried to obtain ransom money. At all times my brother was escorted by the kidnappers. Should he have run? Should he have tried to get help? I would have."

But from what the evangelist had observed of his estranged family, Jon "was a total slave to my mother. He saw himself as her provider and rescuer. All his life she had talked down to him and made fun of him and now, in his mind, he would show her his worth by single-handedly rescuing her."

As for The Famous Atheist, Bill Murray imagined her at the end.

"I can see her now, looking down the barrel of a gun, saying, 'You don't dare shoot me. I AM MADALYN MURRAY O'HAIR.' Of course, the killers did not care who she was, just as most Americans didn't care."

TOMORROW: Following the money

CAPTION: "Unholy trinity": O'Hair, center, son Jon, and granddaughter-turned-adopted-daughter Robin Murray-O'Hair at a 25th anniversary celebration for the American Atheists in 1988.

CAPTION: O'Hair in 1963 with sons William, left, and Garth at the Supreme Court.

CAPTION: William Murray battled addiction and became a born-again evangelist.