I heard a rumor yesterday that they had hit their stop-loss (typically if a fund loses 50% of their capital, they have to dissolve the fund and give the rest back to investors) but wasn't able to confirm it until this morning. Bloomberg is now reporting that LTCM is down 44% in August and 52% for the year. They are reportedly seeking new investment from their fund participants, but my guess is this means they are down to $2.3B and will be out of business soon.
In any case, it's a good answer to the question: where has all the money gone?
Meriwether, the king of liar's poker, appears to have lost.