Daniels (DiCaprio) is Laeddis. His wife did not get killed by a fire. Laeddis/Daniels shot her after she drowned her three children (exactly the same story as Rachel Solando's story (she's a fake "prisoner")). There is nothing in the lighthouse and when Daniels/Laeddis gets there he suddenly remembers everything. Dr. Cawley (Ben Kingsley) tells him that it was a big role-play to test a new cure (Daniels/Laeddis thinks he's a US Marshal and he thinks he got to Shutter Island because he has to solve a case but in fact he's been there for over two years already). The only alternative is a frontal lobotomy, so the role-play is a last ditch effort. Chuck (Mark Ruffalo) is actually his therapist Dr. Sheehan. The treatment appears to stop his mind from creating his delusional reality, but the next day he turns Dr. Sheehan and says "We gotta get off this rock Chuck." Sheehan looks across the courtyard and shakes his head at Cawley, to let him know the treatment didn't work. As Laeddis is being led away for his lobotomy, he tells Sheehan "Which would be worse, to live as a monster or to die as a good man?" suggesting that he possibly faked his relapse and wants to be lobotomized. The final shot is of the lighthouse where he will meet his fate.
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