The case of the criminal crematory got more twisted Tuesday when investigators discovered photos of decomposing bodies on Ray Brent Marsh's office computer and found that the incinerator he claimed was broken was working after all. 

Meanwhile, the search continued for yet more uncremated bodies as authorities began draining a three-acre lake near Brent's crematory. More than 300 corpses have already been found stacked in sheds or left to rot in the woods nearby.

Marsh remains in jail on 118 charges of theft by deception for taking payment to cremate the dead and instead passing off cement powder and dirt as ashes. He'd claimed at first to investigators that he didn't incincerate the bodies because the incinerator wasn't working.

That explanation was shot full of holes when the machine's manufacturer successfully tested it last week, state emergency agency spokeswoman Lisa Ray said.

Adding to the mystery -- and the ghoulishness -- investigators discovered photos of decomposed bodies on Marsh's office computer, prosecutor Buzz Franklin said. Franklin did not say why Marsh was storing the photos.

So far, 339 rotting bodies have been discovered since Feb. 15.

It's not known how many more might be in the lake. Authorities said they will probably spend more than a week dredging the dry lake bed for human remains. A skull and a torso were discovered in the lake last month. Pipes drew enough water to drop the lake level by 6 inches Monday, authorities said. They estimate the lake outside Tri-State Crematory is 8 feet deep at its deepest point.

Marsh was denied bail on Monday for a third time by Magistrate Judge Jerry Day, who noted more charges were likely. Prosecutors said they were worried Marsh might be killed if released.

Sheriff Steve Wilson testified that at a victims' meeting one woman said she wanted to hang Marsh, and the threat was met with thunderous applause.

Defense attorney Ken Poston criticized the prosecution for discussing the threats.

 "If that isn't inviting trouble and torches and ropes, then I don't know what is," he said.

The Associated Press contributed to this report.