Mental health decline and career attempts
In 1966, Sedgwick became involved with folk singer Bob Neuwirth, who was Dylan's road manager. Neuwirth was the first filmmaker to work with Sedgwick after her break with Warhol. On Easter Sunday, he filmed a satirical short featuring Sedgwick parading up Fifth Avenue in a leopard-skin coat while leading her roller-skate-mounted rhinoceros-shaped footstool. The police jokingly gave the four-wheeled rhinoceros a parking ticket after she tied it to a fire hydrant. Throughout the year, Sedgwick became increasingly dependent on barbiturates. When she returned to California for the Christmas holidays, her parents put her in a psychiatric ward.
After her return to New York in 1967, Sedgwick attempted to establish a mainstream acting career. According to Neuwirth, "She didn't want to make any more fatuous films with Andy. But the establishment moguls didn't think she was capable of handling big parts. She was hot at one point and she hadn't capitalized on it." In March 1967, Sedgwick auditioned to replace Beverly Bentley in Norman Mailer's Off-Broadway adaptation of his novel The Deer Park, but was not cast. Mailer said, "She was very good in a sort of tortured and wholly sensitive way … She used so much of herself with every line that we knew she'd be immolated after three performances."
As British model Twiggy rose to international fame for her slim figure, short haircut, and dramatic eye makeup, Sedgwick attended a party in her honor in New York in March 1967. Women's Wear Daily quoted Sedgwick as saying, "Twiggy copied me two years ago," adding that she was "America's own original Paper Girl."
Shortly after, Sedgwick was cast by Chuck Wein in Ciao! Manhattan, an underground film he was directing. Filming began in April 1967 with only a loosely developed script, and the project gradually evolved into a semi-autobiographical portrait of Sedgwick's life. While filming Ciao! Manhattan, Sedgwick was taking a lot of speed, and she survived a second fire after a cigarette ignited her mattress in her room at the Hotel Chelsea, though her cat was killed in the blaze. Around this time, she returned to the Factory to make one final film with Ondine. Ondine later recalled, "I'd never seen Warhol walk away from his camera in a fit of just absolute, abject disgust but during that filming, a little movie of his called Edie and Ondine he just said, 'Stop, I won't film anymore.'" "Once Andy makes up his mind against you, you don't return in a Warhol film. But in this case he tried," Ondine said. He described the unreleased reel as "total collapse of a person" and said that viewers at the Factory found it painful to watch.
In August 1967, filmmaker Richard Leacock cast Sedgwick as Lulu in film sequences for a production of Alban Berg's opera Lulu being staged by Sarah Caldwell and the Boston Opera Company. Leacock said that Sedgwick arrived in London "absolutely desperate" and dependent on drugs, requiring constant attention during the production. Leacock enlisted Neuwirth to accompany the crew, but the responsibility of caring for Sedgwick proved difficult, with Neuwirth stating that he could not act as her "nursemaid." After Neuwirth, she subsequently dated singer Dino Valente and actor Patrick Tilden.