1. He seemed to be living the story about the painter who had sold his painting skill in order to make money.
2. He seemed to be living in the story about the painter who had sold his painting skill in order to make money.
3. He seemed to be living by the story about the painter who had sold his painting skill in order to make money.
[Which sentence is grammatical? Do we have to put a preposition before 'the story'?]