It was a couple of years later than that. Merle Watson was a great guitarist, particularly as a finger-picker and slide player, and Doc has maintained that his (Merle's) playing never got the recognition it deserved. Merle had the double handicaps of being "And Merle Watson"--Doc's long shadow--and substance abuse problems. I don't know if the latter contributed to his accidental death, but during much of the 80's Merle wasn't in shape to tour with Doc, who would take Sam Bush or others with him instead.
A tragic loss for Doc, and for all of us.