It was Isildur.
Please allow me to explain. We all know the story as it was told to Bilbo, Frodo, and Sam: Isildur cut the Ring from Sauron’s finger, causing Sauron’s spirit to flee. Two years later Isildur was ambushed by Orcs, betrayed by the Ring, and killed. If we look deeper, however, there are some holes in this story.
- Isildur asks if it was “not I who dealt the enemy his death blow?” in defense of his claim to the Ring. Since he took the Ring, we can reasonably surmise that neither Elrond nor Cirdan could offer a satisfactory response. For the supposed historical fact of Sauron’s survival to be true, then two of the wisest Elves, who witnessed firsthand the events at Mount Doom, would have to be wrong.
- We know from Galadriel that taking a Ring of Power is a dangerous thing, as she is afraid that she might become the new Dark Lord/Dark Queen were she to do so. Gandalf expresses a similar fear. Isildur certainly wasn’t a Maia or an Elda, but he of the Numenoreans from before the fall, and thus more like to the Eldar than to the Men of Middle-earth in the Dark Years.
- Isildur’s body had supposedly fallen in water no more than shoulder-deep, and even remained in that area for thousands of years, allowing Saruman to find it (UT, The Disaster of the Gladden Fields). However, none of the Numenoreans, not even those who tracked his footprints to the edge of the Anduin and found his gear, found the body. Wouldn’t finding the body of their High King be a priority for the Numenoreans?
With this in mind, we can draw a few conclusions. Isildur had killed Sauron, and in taking the Ring set himself on the path to taking Sauron’s place as the Dark Lord. While he was living in Gondor for the first two years of the Third Age his increasingly Dark Lord-ish tendencies were kept in check by the influence of his beloved son Elendur (described as very similar to his grandfather Elendil, perhaps even more so than Isildur himself). After Elendur’s death at the Gladden Fields, however, Isildur had lost his link to the goodness. He could find no happiness in the realms of the Numenoreans, and the only other people in the west of Middle-earth were the Men of Dunharrow and their cousins, who would certainly not accept Isildur among them. He had to go east, or south.
It is unclear where exactly he went, but at some point he found the Nazgul. They may have stuck together or split up, it does not matter: within a few centuries after the War of the Last Alliance, Isildur had gathered them to him. He had faded drastically and was all but a wraith himself, but together with the Nine he was stronger, and he still had the Ring. Were he to carve out a new future for himself (and certainly the indirect Heir of Earendil would not settle for a humble future) he would need an army at his back. So he rallied the old Easterlings and Southrons and Orcs. He could hardly do so by admitting to be the former King of Gondor, however, so he impersonated Sauron, knowing that with the Ring he could fool people. Those who had had direct contact with Sauron were centuries dead, after all.
At this point, Isildur began to take an interest in the west again. He sent spies, perhaps including the infamous Queen Beruthiel, back to his former home in Gondor, where he learned the unthinkable. His nephew Meneldur had rejected the rule of the Northern Line (as perpetuated by Isildur’s youngest son) and established itself as an independent state. He must have been filled with fury at the insult done to his son and his bloodline after his apparent death, and he resolved to reap vengeance. Not much later he learned that the Kingdom of Arnor, descended unto him from his father Elendil, had been divided into three petty kingdoms.
At this point he must have felt nothing but disgust for the Dunedain that now lived in the west of Middle-earth, and decided that he should rule over them once more. There was just the little problem of him having been dead for close to a millennium, so he clearly could not just walk into Osgiliath or Fornost and be re-crowned King. Therefore he would have to use his new armies massed in the east to reconquer the west. Once he had achieved victory he could reveal himself as Isildur and rebuild the Numenorean civilization. Isildur sent his agents west to begin their wars against the false pretenders to the Numenorean legacy. He established a base at Dol Guldur and took an active role in orchestrating the attacks on Gondor, largely through his proxies amongst the Easterlings. He could not bring himself to fight against his own heirs, however, so he sent the Lord of the Nazgul to Angmar to do so.
After so long with the Ring Isildur was a wraith now, capable of only the barest of action with the physical world. He became reclusive, talking to almost none save the Nazgul. He created an image as the mighty Necromancer, but in truth he was put the ghost of a man who had a magic Ring. Even after going to Mordor and declaring himself Sauron Redivivus, he remained hidden from almost everyone. Had the truth gotten out he would have been the laughingstock of the West, not its Saviour, or even its Bane.
At this point there are a few major questions that must be answered:
Hold on a moment! If Isildur/Sauron had the Ring, what did Bilbo and Frodo have? The answer to this is quite simple: it was just a magic ring. None of the actual Ringbearers thought it was the One until Gandalf decided it was. To Bilbo it was just a magic ring that could turn him invisible. It was not entirely trivial, however. It had in fact been made by Isildur himself as a decoy for the true Ring. He had even written a false account of “fire writing” on the Ring and stowed it in the archives of Gondor, knowing full well that only his decoy Ring had the fire writing. He had planned to install the decoy ring in an exhibition in Annuminas, but it was lost in the Anduin when he was chased there. He was of course much more concerned about keeping the One safe.
So why was “Isildur” defeated when the “decoy” ring was destroyed? The closeness of these two events in time certainly implies a causal relationship, but as any good scientist knows, correllation does not equal causation. Since the Barad-dur was destroyed we cannot be entirely sure, but it is possible that the Ring was destroyed by a disgruntled servant of Isildur, or that the Ring had simply fallen into some lava moat accidentally. Of course, it was more eucatastrophe than accident, but no one could have known it was an act of God.
Okay … then why did Gandalf make so many mistakes? The first mistake that Gandalf made was to think that the Necromancer in Dol Guldur was Sauron taking shape again. However, that was exactly what Isildur had wanted him to think, and it seemed a sensible conclusion given the apparent death of Isildur many centuries prior. The more striking mistake was thinking that the decoy ring was the One. However, it has already been explained how the evidence of the fire writing was deliberately faked by Isildur. The same is true of the apparent “Hunt” for the Ring. Isildur had learned from Gollum that the decoy Ring was at large, and was able to surmise that Gandalf might think it was the One. Seeing that it would be good for his enemies to be focused on the decoy, he sent the Nazgul after it, but with clear orders to not actually capture it at any time. Hence why the Nazgul pretended not to notice the Hobbits on the road, came to Crickhollow after Frodo had left, etc.
Saruman seemed to think the decoy was the One, was he in on the plan too? No. When Isildur learned that Saruman was hunting for the Ring, he planted a fake body and some of his old heirlooms there for Saruman’s servants to find. Isildur and Saruman only communicated by Palantir, and keeping his distance allowed Isildur to disguise his true identity. He kept up the fiction of the decoy ring in all his conversations with Saruman.
Assuming your theory is correct, what happened after the One was destroyed? These events were actually largely similar to those described in the traditional history. Since the destructions of the decoy and the One happened at more or less the same time, the collapse of those things built with the power of the Ring and the destruction of the morale of the orcs and trolls happened just as described. With the Barad-dur destroyed as well, no evidence detailing the true nature of the Ring could be discovered. Gandalf, Frodo, Aragorn, Saruman, and all the rest never knew what had really happened.
How do you know, then? By discovering the problems with the traditional history. As they say, when you have eliminated the impossible, whatever remains, however improbable, must be the truth.