COVER STORY SNEAK PEEK: Britney's Mental Illness

"She's suffered from a psychological disease for years," says a source close to her

Britney Spears‘s family “is terrified,” a family friend tells PEOPLE in its latest cover story, on newsstands Friday. With the singer continuing to shun longtime friends and relatives, “everyone has been worried for some time,” says the source. “Her world has been crumbling around her.”

As the drama rapidly unfolds, the questions seemed to be: How did the once-sparkling singer with the homespun charm and earnest enthusiasm fall so far, and so hard – and what can be done to help her?

Several sources say the events are the results of a long-gestating mental illness. “She’s suffered from a psychological disease for years,” says a source close to the singer. Two separate sources close to Spears believe she has been diagnosed as bipolar, while additional sources confirm she has been prescribed at least one antidepressant/anti-anxiety drug.

Yet “she does not think she has a problem,” says a source close to Spears. Dr. Mark Goulston, a Santa Monica-based psychiatrist who has not treated Spears, points out that “manic behavior is when you don’t have any sense of rules. There’s a grandiosity: ‘I play by my own rules.’ ”

For more on this story, including Britney’s behavior while in the hospital, and ex-husband Kevin Federline’s reaction to the situation, pick up the new PEOPLE, on newsstands Friday