Keith Spence's first reaction when he heard his former drinking buddy Eugene "Jack" Armstrong had been taken hostage in Iraq was that Armstrong "was going to come home and get a lot of mileage out of it."

"He always told funny stories about what happened to him," said Spence, 47, recalling the time Armstrong wrecked his Harley-Davidson motorcycle and lived to tell about it -- over and over. "He was always a good time, always a real good guy."

It only made sense that Armstrong would make it out of Iraq alive, reasoned residents of the small town in southern Michigan where he grew up and worked his first construction jobs. He had no grievance with the Iraqis and why would they have any with him? He was just over there as a worker, they said, an innocent man doing his job.

"It was a good guy trying to do a good deed in the wrong place," said Penny Lindsey, who sells ice cream down the street from the Hillsdale County Courthouse, scene of an impromptu prayer service and patriotic rally after a guerrilla group showed Armstrong's beheading on an Internet video.

Several dozen people stood outside the courthouse tonight, bearing lighted candles and waving small American flags. They sang a Christian hymn, then followed it with "God Bless America" and the Pledge of Allegiance. Nearby, yellow ribbons of good fortune, tied in hopes of a happier ending, fluttered from the trees.

"We're grateful to be Americans," state Sen. Cameron S. Brown declared. He called Armstrong's death "a tragedy for the free world."

Sen. Carl M. Levin (D-Mich.) issued a statement saying the killers "perpetrated an atrocity on an innocent man." His fellow Michigan Democrat, Sen. Debbie Stabenow, described the murder as a "cowardly act" and said it renews the U.S. commitment to "eliminating the agents and roots of terrorism around the world."

In Hillsdale, Tracy Osborn said Armstrong's death demonstrates that the Bush administration is right to be waging war for Iraq.

"He died for us. He was fighting for our freedom," Osborn said of Armstrong, a construction worker. "If he wasn't over there, they'd be over here trying to kill us."

Osborn, like many residents of Hillsdale, a town of 9,000 about 100 miles southwest of Detroit, did not know Armstrong. He attended high school nearby but has not lived here since 1990.

Relatives declined to give interviews tonight, but issued a statement saying they are praying for the two remaining hostages.

Spence remembered Armstrong well and fondly, particularly from long nights of story-telling at the Hub, a downtown bar long since replaced by the Hunt Club, across from the courthouse. He regretted that most of the stories were not suitable for a family newspaper, including the most savory details of the aftermath of his motorcycle crash.

"Even his old girlfriends liked him," Spence said. "He always had a real big heart."

Staff researcher Lucy Shackelford contributed to this report.

Hostage Eugene "Jack" Armstrong was seen on a video posted Saturday on the Internet by a militant Islamic group.