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The whole story is pretty troubling. Watch The Devil And Daniel Johnston to get the full scoop on this.
That article is all wrong though. He wasn't touring with SY, he was in New York to record with Mo Tucker, among others, and to play a few shows, which Steve set up. They took him around NY to see the sights, which is how he came to be arrested/fined for drawing all those fish on the stairwell of the statue of liberty. As his mental problems grew more and more worrying, Daniel disappeared. Steve was freaked out. Eventually Lee and Thurston found him after driving around for hours, and they put him on a bus home to his parents house. Of course, Daniel got off the bus at the wrong stop and was arrested for some other crime which had something to do with chasing an old woman out of a second-floor window because of demons.
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