The 43-year-old Nazario Moreno was riding a mule near the hut in Michoacan state when he was confronted by troops early Sunday and killed in a gunbattle, said the official, who agreed to discuss the hunt only on condition of anonymity because he wasn't authorized to make the details public.
He said authorities found flat screen televisions and several books inside the hut.
Moreno had been hiding since being declared dead by the Mexican government after a December 2010 shootout with federal police, even though officials found no corpse.
The official said Moreno was carrying two letters, one addressed to his daughter and the other to God but he wouldn't reveal their content. He also said Moreno was wearing a medallion with a red cross, a symbol of the pseudo-religious Knights Templar gang.
In the weeks leading up to Moreno's death, authorities had captured another Templar leader, Dionisio Plancarte, as well as Moreno's half-brother and the son of Moreno's closest ally, Servando "La Tuta" Gomez, who remains at large. The official said the three provided information that helped locate Moreno.
"Federal forces kept closing in on him each passing day," Alfredo Castillo, the federal government's envoy to Michoacan, told reporters Wednesday.
Before starting the Knights Templar, Moreno founded La Familia cartel, which was the first target of then-President Felipe Calderon's assault on Mexican drug trafficking that began in late 2006.
La Familia reportedly took its inspiration from an odd source: the book "Wild at Heart" by American evangelical author John Eldredge of the Colorado Springs, Colorado-based Ransomed Heart Ministries. A Mexican government profile said Moreno "erected himself as the 'Messiah,' using the Bible to profess to poor people and obtain their loyalty."
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