1983 marked the return collaboration of producer Bob Ezrin and guitarist Dick Wagner for the haunting epic DaDa, the final album in his Warner Bros. contract.
In mid-1983, after the recording of DaDa, Cooper was hospitalized for alcoholism again, and cirrhosis of the liver. Cooper was finally stable and sober (and has remained sober since that time) by the time DaDa and The Nightmare home video (of his 1975 TV Special) were released in the fall of that year; however, both releases performed below expectations. Even with The Nightmare scoring a nomination for 1984's Grammy Award for Best Long Form Music Video (he lost to Duran Duran), it was not enough for Warner Bros. to keep Cooper on their books. By February 1984, Cooper became a "free agent" for the first time in his career.
Cooper spent a lengthy period away from the music business dealing with personal issues. His divorce from Sheryl Cooper was heard at Maricopa County Superior Court, Arizona, on January 30, 1984. The following month he guested at the 26th Annual Grammy Awards alongside co-presenter Grace Jones. Behind the scenes Cooper kept busy musically, working on new material in collaboration with Aerosmith guitarist Joe Perry. The spring of 1984 was taken up with filming, Cooper acting in the B-grade horror movie Monster Dog, filmed in Torrelodones, Spain. Shortly thereafter he reconciled with Sheryl; the couple relocated to Chicago. The year closed with more writing sessions, this time in New York during November with Hanoi Rocks guitarist Andy McCoy. In 1985, he met and began writing songs with guitarist Kane Roberts. Cooper was subsequently signed to MCA Records, and appeared as guest vocalist on Twisted Sister's song "Be Chrool to Your Scuel". A video was made for the song, featuring Cooper donning his black snake-eyes makeup for the first time since 1979, but neither the song nor the video drew public interest.