It does sound like a difficult search.
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After looking at the census records, I think Leo Schallenberger from Fort Wayne is probably the most promising prospect to look into, just because of his geographic proximity.
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Unfortunately, there probably won’t be much of a paper trail to follow, aside from what you’ve already found. Your best bet is family stories/rumor. Usually the sensitivity of an issue like this to a family tends to wane when it gets to be a matter of history, rather than someone currently living. I don’t think asking his children about family rumors they’ve heard would be too far out of line. Just state your case like you have here…you don’t know…you’re just wondering if they’ve heard anything that might help confirm or deny your suspicions. The worst they can do is not reply. If he never spoke of it, there will be no trail. If he did, you might just get lucky.
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If you need help finding his family, try the following:
Leo’s obit can be obtained from the Allen County Public Library.
(There are two to look at: Leo A 02/16/1972, and Lawrence A. 10/03/1969.) (Just look for the one that was married to Ada M.)
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These were 30 years ago, so his children could be around 80 years old now.
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After obtaining the names of any children, run them through the Social Security Death Index (SSDI):
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For any not found above, check Intellius (http://www.intelius.com/) for age & cities of residence to check for possible living relatives that don’t show up in the SSDI. (you don’t have to use the pay portion of the site to view this…it’s free)
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Then check the white pages:http://www.addresses.com/
to find a specific address in that city that you can mail a letter to.
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Mailing letters to distant relatives is very hit-or-miss. I’ve found relatives that are more passionate about Genealogy than I am…but all too often others don’t reply. Still, it’s worth a shot…and it may be the only chance you have to confirm a connection to Leo. A “no” answer doesn’t mean it isn’t possible…it just means they never heard it. A “yes” answer though, could be very helpful to your search.
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Hope this helps.

I can’t offer much except a hug.
I have one adopted child, two bio children. I have means to access the birth family IF my son ever asks. To date, he chooses to not have contact.
Never give up.. you don’t know what will fall into your lap. A person might be out there, who is going to post NEXT WEEK and it will be there. My strangest find? A distant cousin/branch gave up a baby for adoption, when the father was close to 60, had grown children already, and the mom died at childbirth. They wanted to record it somehow, legally.. and the affidavit wound up in the land deed book .. they didn’t know where to put it. This was an 1869 adoption.
As for yours.. my advice would be to keep networking with siblings/ siblings children of the bio mom. They could be the keepers of an ancient letter or something to that end.