  We report on the X-ray spectral behavior of the exceptionally bright X-ray
nova XTE J1550-564 during its 1998-99 outburst. Our study is based on 209
pointed observations using the PCA and HEXTE instruments onboard the Rossi
X-ray Timing Explorer spanning 250 days and covering the entire double-peaked
eruption that occurred from 1998 September until 1999 May. The spectra are fit
to a model including multicolor blackbody disk and power-law components. The
source is observed in the very high and high/soft outburst states of black hole
X-ray novae. During the very high state, when the power-law component dominated
the spectrum, the inner disk radius is observed to vary by more than an order
of magnitude; the radius decreased by a factor of 16 in one day during a 6.8
Crab flare. If the larger of these observed radii is taken to be the last
stable orbit, then the smaller observed radius would imply that the inner edge
of the disk is inside the event horizon! However, we conclude that the apparent
variations of the inner disk radius observed during periods of increased
power-law emission are probably caused by the failure of the multicolor
disk/power-law model; the actual physical radius of the inner disk may remain
fairly constant. This interpretation is supported by the fact that the observed
inner disk radius remains approximately constant over 120 days in the high
state, when the power-law component is weak, even though the disk flux and
total flux vary by an order of magnitude. The mass of the black hole inferred
by equating the approximately constant inner disk radius observed in the
high/soft state with the last stable orbit for a Schwarzschild black hole is
M_BH = 7.4 M_sun (D/6 kpc) (cos i)^{-1/2}.

Astrophysics