I've learned a few things from this (my) experience:
- Most people really are not interested in getting to the bottom of anything. Even if it is pretty serious and damaging. Sad but true. They can't be bothered to doubt their first instincts.
- Most people think they are such a rock-solid judge of character.
- If something doesn't add up, people may notice but then sweep it under the rug.
- Personality disorders are probably too hard a concept for people to consider. One thinks of a mental disorder as a person gibbering nonsense.
There seems to be no shortage of people who will happily listen to one side of an argument and disseminate it. I've even met people for the first time, and when they found out my name say something along the lines of: "Oh, I've heard all about you."
It really is childish behaviour, anyone with a modicum of decency would confront you about it, and let you have your say. If they don't, they're not worth knowing (IMHO).
http://chronicle.com/article/I-Will-Ruin-Him/136693/
It sounds like your situation is similar, though perhaps less extreme.
I usually try to stay away from drama queens like my sanity depends on it, but when family members do it, not easy or (always right) to ignore them. I tried to explain, rationalize, reason with them and their drama ways; but it didn't help much.
I think drama loving people are kind of addicted to how it makes them feel.
foment drama --> experience drama --> dopamine hit...
We've a natural tendency to be egocentric because whenever we look around... we are at the centre. Happens at all scales e.g. geocentricism, anthropomorphism.
It didn't help that I really had been unlucky in love for months at that time, and I once confided to said threesome girl my situation over a coffee. I did express to her quite clearly who my "problem" person was, but for some reason (and I learned that only much later from a meetup with her boyfriend) she actually thought I was again speaking about her, in code. I was not. However, she convinced a lot of people.
Only after noticing that quite a few friends and acquaintances were turning their backs on me lately, and a few people coming out and saying strange things like "hey, what's up with you and X, you gotta let her go, man" or even "dude, I heard what you did and it's not seriously not cool" I gradually learned that this person was waging an epic info war around and about me, who supposedly couldn't stop hitting on her. Upon learning this, I broke off contact immediately, but to my amazement the damage was still unfolding.
I simply could not believe the amount of gossip and straight-up fantasy people engaged in with me playing some kind of role in what had become a huge reality soap opera. Honestly, I never thought I was that interesting. But that didn't matter, because the made-up stuff just kept coming. It was as if I had a very active doppelgänger walking and talking around somewhere. It was absolutely stunning, and more than a bit horrifying. There are a lot of things I still can't wrap my head around. What was she getting out of this? And all the time, we had a "hey, let's grab a beer and cheer you up"-kind of relationship that I thought was pretty good. Why would anyone do this? And why was everyone willing to not only listen but also willing to add to this story?
Now, years later, my circle of friends has shrunken immensely. There are a lot of people who won't talk to me anymore, and I never got to find out why exactly. I only know that the moment I start asking questions, the whole affair seems to get reactivated. One friend told me only recently (unprompted) that there are so many conflicting stories about me in circulation, it's hard to keep track of them all. And none of them is good.
Why me? I'm neither rich, nor good-looking, nor in any imaginable way socially interesting. Seriously, it's stunningly stupid, and I can't for the life of me understand what powers this process. But it happened. A home-made conspiracy story. Sometimes, people really do talk behind your back - a lot.