Isildur remained in Gondor to settle its affairs and see to it that his nephew, Meneldil, was left in command at Minas Anor. The army of Arnor, however, returned to the northern lands via the route that went across the Fords of Isen and west of the Misty Mountains to the capital of Annuminas.
By the middle of the second year of the Third Age, Isildur was eager to return to Arnor. He also wanted to make haste to see his wife and youngest son who he had left to the safety of Imladris (Rivendell). The faster and more direct route to the Elven retreat was to follow the Anduin north from Osgiliath, cross the river at the Ford of the Carrock and take the high pass over the Misty Mountains down into the valley where Elrond and his people dwelled. Isildur's intent was also to take Elrond's counsel about his possession of the One Ring, which he hung on a gold chain around his neck. Elrond had implored Isildur to destroy it in the Fires of Doom, but the Dunedan King had refused. Now, he was in doubt about his actions and began to be wary of the Ring's hold on him.
A brief account of Isildur's journey and the tragedy that befell him is told in Appendix A of "The Lord of the Rings". However, Tolkien fleshed out the details of this story after the book was published and it is included in this volume.
Isildur set out just before autumn with an accompaniment of some two hundred soldiers. Among them were this three older sons; Elendur, Aratan and Ciryon. The march was expected to take about forty days from Osgiliath to Imladris. Journeying up the east bank of Anduin, they passed the land of Lothlorien on their left, across the river. To their right was the southern portion of the forest of Greenwood (later known as Mirkwood). Their mood was buoyant, even though it had rained straight for the last four days. The rain had the effect of swelling the rushing waters of the Anduin. With the Vales turning marshy - "a wilderness of islets" - and difficult to navigate, the Dundain moved in a more northeasterly direction to the higher ground.
As the sun began to sink on the thirtieth day of the journey, an army of Orcs some two thousand strong descended upon them from the forest. A mass of clouds had blocked the light of the sun, prompting the Orcs to reveal themselves from their cover to attack. Despite the fact that Mordor had been defeated, these Orcs were intent on destroying the Dunedain. Tolkien explains:
"The Orcs of the [Misty] Mountains were stiffened and commanded by grim servants of Barad-dur, sent out long before to watch the passes, and though it was unknown to them the Ring, cut from his black hand two years before, was still laden with Sauron's evil will and called to all his servants for their aid."
Though the Orcs were likely unaware that the war was over, they were drawn to the power of the Ring and were fueled by a desire to please their master who they assumed was still engaged in battle in Mordor.
Isildur knew that the odds were against them but he was determined to stand and fight. To his esquire, Ohtar, he entrusted the sheath and shards of Narsil, his father's sword. He ordered him to flee and deliver them to Elrond in Imladris. Ohtar and another of the men obeyed, heading quickly down into the valley and escaping the skirmish. At first the Dunedain were able to repulse the onslaught. The return of the sun from behind the clouds force the Orcs to retreat back into the forest. But Isildur knew that nightfall would soon be upon them. He ordered his men to swiftly march towards the flatter ground near the river. But they had gone scarcely a mile, when the Orcs attacked again, this time encircling the men and cutting off their escape.
Elendur, Isildur's oldest son, beseeched his father to use the power of the Ring against the Orcs. But Isildur confessed that not only was the touch of the Ring too painful to bear but he had not yet the strength to bend it to his will. He despaired at his own foolish pride for not destroying it when he had the chance. As the battle raged, his two younger sons Ciryon and Aratan lay dead or mortally wounded. Seeing that all was lost, Elendur at last begged his father to flee himself.
"'My King', said Elendur, 'Ciryon is dead and Aratan is dying. Your last counsellor must advise, nay command you, as you commanded Ohtar. Go! Take your burden, and at all costs bring it to the Keepers: even at the cost of abandoning your men and me!"
'King's son,' said Isildur, 'I knew that I must do so; but I feared the pain. Nor could I go without your leave. Forgive me, and my pride that has brought you to this doom.' Elendur kissed him. 'Go! Go now!' he said."
Isildur then pulled the Ring from its chain and put it on, disappearing from sight. The rest of the Dunedain were all killed save for one, Elendur's esquire who was named Estelmo. When he was discovered alive, he was able to bear witness to the events of the battle. Isildur made it down to the river, where he cast off his armor and weapons and jumped in. As hard as he swam, he was washed by the raging waters of the Anduin further south. He was barely able to get to the other side when he was caught in the tangled weeds of the Gladden Fields.
It was then that he realized that he had lost the Ring. It had escaped him, sinking to the murky bottom of the river. Desperately fighting his way through the mud and reeds of the shoulder high waters of the western bank, he emerged in plain sight of some Orcs who were patrolling the other side. They shot their poisoned arrows and Isildur fell backwards into the shallow waters, dead. No trace of his body was ever found by Elves or Men.
But this is not the end of the tale. Certainly Ohtor and his companion, as well as Estelmo, were able to offer their accounts of the incident. And word came quickly to Thranduil's people of the attack. They arrived shortly after the battle's end to investigate the scene. But it had to be surmised what exactly happened to Isildur when he fled based on his belongings found scattered along the eastern shore. Without any trace of the Ring or Isildur himself this remained a topic for speculation among the White Council as they debated what course of action they should take.
After the War of the Ring was over, however, more information would come to light that would help answer this mystery.
In "The Silmarillion", Tolken recounts is his essay entitled "Of The Rings Of Power And The Third Age" of how Saruman took a serious interest in the One Ring once the Shadow began to manifest itself again in Middle-Earth. When the White Council was formed in the year 2463, it began to focus its attention on the finding of the Ring. Saruman tried to assuage their concerns by asserting that it was not possible to find it and he theorized that it must have washed down the Anduin all the way to the Sea. Elrond, Galadriel and Gandalf were not wholly convinced and while they remained troubled they took no action at that time.
But, secretly, Saruman kept a watch on the Gladden Fields and through his spies was determined to find out any information as to its possible whereabouts. He had reason to believe that servants of Sauron were also engaged in their own search. Though the White Wizard was unable to locate the Ring, this essay in "Unfinished Tales" points out that his search was not completely fruitless.
Once Aragorn was crowned King Elessar, one of his first duties was to restore the tower of Orthanc in Isengard and return the Palantir that belonged there. When the tower was searched, it was discovered that Saruman had accumulated many valuable items from Rohan. And behind a hidden door (opened with the assistance of Gimli), a secret closet was found. In it were two remarkable items that had passed out of memory:
"One was a small case of gold, attached to a fine chain; it was empty, and bore no letter or token, but beyond all doubt it had once borne the Ring about Isildur's neck. Next to it lay a treasure without price, long mourned as lost for ever: the Elendilmir itself, the white star of Elvish crystal upon a fillet of mithril that had descended from Silmarien to Elendil, and had been taken by him as a token of royalty in the North Kingdom."
These objects could only have been found upon the body of Isildur. Therefore it was correctly determined that he had not washed down the river as previously thought. When killed, Isildur must have fallen into shallow waters, caught in the marshy reeds of the bank. This information ultimately helped to complete the story of what really happened at the Gladden Fields - an event that would determine the course of the Third Age, ending with the War of the Ring.