[Flow]

Don't know who it was who was getting this confused at the start of the tread but its as simple as this:

he killed his wife
Due to te stress of what she did an what he did he became unstable
He creates a fake person who killed his wife to deal with it
He lives a fake life of investigating the island every day as a means to deal with reality
The bit at the end of the film is added for the film in the original book he is still mental

There was no concspiracy etc