Pound arrived in Naples in July, where he was photographed giving a fascist salute to the waiting press. When asked when he had been released from the mental hospital, he replied: "I never was. When I left the hospital I was still in America, and all America is an insane asylum." He and Dorothy went to live with Mary at Castle Brunnenburg near Merano in the Province of South Tyrol – where he met his grandson, Walter, and his granddaughter, Patrizia, for the first time – then returned to Rapallo, where Olga Rudge was waiting to join them.
They were accompanied by a teacher Pound had met in hospital, Marcella Spann, 40 years his junior, ostensibly acting as his secretary and collecting poems for an anthology. The four women soon fell out, vying for control over him; Canto CXIII: alluded to it: "Pride, jealousy and possessiveness / 3 pains of hell." Pound was in love with Marcella, seeing in her his last chance for love and youth. He wrote about her in Canto CXIII: "The long flank, the firm breast / and to know beauty and death and despair / And to think that what has been shall be, / flowing, ever unstill." Dorothy had usually ignored his affairs, but she used her legal power over his royalties to make sure Marcella was seen off, sent back to America.
By December 1959 he was mired in depression. He saw his work as worthless and The Cantos botched. In a 1960 interview given in Rome to Donald Hall for Paris Review, he said: "You – find me – in fragments." Hall wrote that he seemed in an "abject despair, accidie, meaninglessness, abulia, waste". He paced up and down during the three days it took to complete the interview, never finishing a sentence, bursting with energy one minute, then suddenly sagging, and at one point seemed about to collapse. Hall said it was clear that he "doubted the value of everything he had done in his life."
Those close to him thought he was suffering from dementia, and in the summer of 1960 Mary placed him in a clinic near Merano when his weight dropped. He picked up again, but by the spring of 1961 he had a urinary infection. Dorothy felt unable to look after him, so he went that summer to live with Olga in Rapallo, then Venice; Dorothy mostly stayed in London after that with Omar. Pound attended a neo-Fascist May Day parade in 1962, but his health continued to decline. The following year he told an interviewer, Grazia Levi: "I spoil everything I touch. I have always blundered ... All my life I believed I knew nothing, yes, knew nothing. And so words became devoid of meaning."
William Carlos Williams died in 1963, followed by Eliot in 1965. Pound went to Eliot's funeral in London and on to Dublin to visit Yeats's widow. Two years later he went to New York where he attended the opening of an exhibition featuring his blue-inked version of Eliot's The Waste Land. He went on to Hamilton College where he received a standing ovation. Shortly before his death in 1972 it was proposed he be awarded the Emerson-Thoreau Medal of the American Academy of Arts and Sciences, but after a storm of protest the academy's council opposed it by 13 to 9; the sociologist Daniel Bell, who was on the committee, argued that it was important to distinguish between those who explore hate and those who approve it. Two weeks before he died, Pound read for a gathering of friends at a café: "re USURY / I was out of focus, taking a symptom for a cause. / The cause is AVARICE."
On his 87th birthday, 30 October 1972, he was too weak to leave his bedroom. The next night he was admitted to the Civil Hospital of Venice, where he died in his sleep of an intestinal blockage on 1 November, with Olga at his side. Dorothy was unable to travel to the funeral. Four gondoliers dressed in black rowed the body to the island cemetery, Isola di San Michele, where he was buried near Diaghilev and Stravinsky. Dorothy died in England the following year. Olga died in 1996 and was buried next to Pound.