Speak Well Of The Dead

My personal opinion is that there's no harm in it as long as you do change the details. Or, try this test: if you'd gotten the same idea from, say, an anecdote told about a family friend, would you hesitate to fictionalize it if you thought it would make a good story?

Ideas come from all over the place. As long as you don't feel bound to the source -- as long as you are willing to add, change, and reorder things to make the story more appealing -- you shouldn't (or, at least, I wouldn't) fear that the story will come across as anything but fiction. It's only if you stick over-scrupulously to the facts to the artistic detriment of the story that it has any chance of being mistaken for a disguised biography.

Well -- sorry if I'm getting a bit high-flown. That's my $0.07. (Doesn't inflation suck?)

Are you kidding?
Do you know how many of us mystery writers have an idea sparked from an event we see on the news or in the paper.
Change names, palces, and don't recount exact events word for word.
As long as the obits are merely sparking the story and not telling it, I think you'll be fine.