John Prine's "Lake Marie" - true story?

Finally got to see John Prine in concert! What a treat. On the way home from the show, my wife was asking just what exactly is the song “Lake Marie” about. My impression is that Prine is telling a story about how he met a former wife. But the last verse of the song paints a pretty graphic picture of a gruesome murder scene involving, I assume, the ex-wife.

Question #1, is this a true story? Was his (ex-?) wife horribly murdered? What happened?

Question #2, there were two bodies, who was the other person?

http://www.jpshrine.org/biography/frainbio.htm

Cool, thanks. I had tried to google for some info but about all I was finding was the lyrics, no background on the story. The thing is, I’ve seen him perform this before on “Austin City Limits” and/or “Sessions at West 54th” and he seems to get very emotional when he plays it, so it almost does make it seem like there is some truth to it.