Probably makes sense to merge these threads. The prior thread has a lot of good info in it.
As reported in the local press at the time there clearly was a shooting in St Louis in 1895 which a man known as "Stagger" Lee shot and killed a man named William Lyons in a bar and Lee's hat was involved in the dispute. As such it would seem highly probable that the words of the song relating to Stagger Lee shooting Billy De Lyons over a hat relate to that incident.
However, there does appear to be some evidence that there may have been a song already in existence referencing a Stacker Lee and possibly another murder(not Lyons). Stacker Lee was apparently a somewhat common name for stevedores along the Mississippi as well as the name of a river boat. I have not researched the preexisting song - just seen references - and I don't know what sort of words or tune it may have had, although some of that may have been covered in the prior thread. However, it is certainly quite possible that the two songs merged; or that even if the St Louis murder did not spawn its own independent song, the story got grafted onto a preexisting song that referenced a similar name and possibly a similar incident.
The song with words involving the St Louis murder seems to have become popular very quickly after the crime (although the version involving the hat was apparently not documented until John Hurt's recording in the twenties). As described in my notes in the prior thread there are good reasons why this sudden musical popularization of a local incident could have occurred simply due to the surrounding circumstances and times. However, if there was a preexisting song known up and down the river that that could certainly have facilitated the process.
It is after all folk music. I seem to recall similar debates about Tom Dula,as well as two other St Louis claimed crime songs Frankie and Albert, and Duncan and Brady. There are some basic known facts and then there is the music which has some, but possibly not a great, relationship to them. The original crimes may not have been extraordinary (at least not the ones in the City where similar crimes were commonplace) but the folk process made them so. At this point about all we can say is that the basic murder story in Stagger/Stacker/Stag-o etc Lee as we know it now in many of its most popular versions seems to have significant ties to the St Louis incident, and that those versions resonated enough with the public to support a long lasting popular folk based song. It would be interesting to hear more about the possible preexisting song or songs.