On April 6, 1967, 20-year-old Hegdahl was knocked overboard by the blast from a 5-inch gun mount from the in the Gulf of Tonkin, three miles off the coast. He swam until he was picked up several hours later by Cambodian fishermen who treated him well. Trying to cover for him, his shipmates did not report him missing for two days, so the commanding officer did not organise a search. Hegdahl was handed over to Vietnamese militiamen who clubbed him repeatedly with their rifles before moving him to the infamous "Hanoi Hilton" prison. The interrogators first believed that Hegdahl was a commando or an agent. His story of being blown overboard seemed unbelievable to the interrogators. Hegdahl thought he would be much better off if he pretended to be of low intelligence. Hegdahl was physically maltreated for a few days before he was able to convince his captors that he was of little value to them. His bumpkin demeanor and youthful appearance aided in his ability to convince them that he was no threat to them. When asked to write statements against the United States, he agreed, but pretended to be unable to read or write, which was believable to his Vietnamese captors. Thinking they had someone who would be easily turned to their cause, they assigned someone to teach Hegdahl to read. After Hegdahl appeared to be incapable of learning to read and write, his captors gave up on him. Later, he came to be known to the Vietnamese as "The Incredibly Stupid One", and he was given nearly free rein of the camp. With the help of Joseph Crecca, a U.S. Air Force officer and fellow prisoner, Hegdahl memorized names, capture dates, method of capture, and personal information of about 256 other prisoners—to the tune of a nursery rhyme "Old MacDonald Had a Farm". Hegdahl is still able to repeat the information. According to his senior officer and cellmate, Lieutenant Commander Richard A. Stratton, Hegdahl also convinced his captors that he needed new glasses and memorized the route from the prison into the city of Hanoi, where he was taken to be fitted. During his prison stay, Hegdahl disabled five trucks by putting dirt in their fuel tanks. Hegdahl was one of three POWs who were released on August 5, 1969, as a propaganda move by the North Vietnamese. Although the POWs had agreed that none would accept early release, they agreed that Hegdahl's release should be an exception. He was ordered by Stratton to accept an early release so that he could provide the names of POWs being held by the North Vietnamese and reveal the conditions to which the prisoners were being subjected. After his discharge, Hegdahl was sent to the Paris Peace Talks in 1970 and confronted the North Vietnamese with his first-hand information about the mistreatment of prisoners.
