A destitute California man who was living on $200 per month disability checks has told of how he became a millionaire when a Navajo blanket thought to be a worthless family heirloom sold at auction for $1.5m.

"Everybody loves a rags to riches story," joked Loren Krytzer, whose staggering windfall came after years of no work and poverty.

He said the chance discovery may have saved his life.

It was in 2007 that a car accident ended his career as a freelance carpenter – his left foot was later amputated.

He became so short of money he was forced to send his children to live with grandparents in Louisiana.

"I mean, what do you do? I had kids to take care of, no money, you know? Nothing saved up or nothing like that," Krytzer told CNBC.

Living in a friend's shack in Leona Valley near Palmdale, he would just about survive on his disability payments. He would spend his days eating cheap food from Costco and drinking vodka to ease the phantom pains in his leg.

The darkest hour is just before the dawn, they say – and the first glimmer of light for Krytzer came in 2011 while tuning in to the US version of popular TV show Antiques Roadshow.

He watched as a shocked elderly man from Arizona was told by appraiser and Native American gallery owner Don Ellis that his First Phase Navajo blanket was worth an eye-watering $500,000.

Krytzer says he immediately thought of the blanket he had inherited from his great-grandmother, and which had been passed down from generation to generation through his family.

"I paused it and I went and got the blanket and I'm sitting there holding it. ... I'm lining up the lines on the TV with the blanket, seeing if they match," Krytzer said. They were nearly identical.

"This guy is on TV, the appraiser says $300,000 to $500,000," he recalled, so "I'm thinking maybe this one is worth $5 to $10 grand."

Krytzer's hope wasn't shared by his family, especially given it had once been used by his grandmother to catch kittens from her pregnant cat. His mother thought he'd be lucky to get $10 for it.

At first, antique dealers were also dismissive, either turning him away or claiming his family heirloom was a run-of-the-mill Mexican blanket.

But when he took his find to specialists at John Moran Auctioneers in Monrovia, California it would go on to become the most expensive item ever auctioned by the business.

The textile was found to be one of the finest and rarest Navajo chief's blankets in the world.

Furthermore, Krytzer was able to provide a history for the blanket, detailing how it had been handed down for generations starting with his great-great-grandfather John Chantland, a Dakota tradesman from the 1800s.

Loren Krytzer
Loren Krytzer's blanket was sold at auction in 2012 JohnMoranAuctions

In another twist, it would eventually be Antiques Roadshow appraiser Don Ellis who would buy the piece for $1.5m after a frantic bidding war lasting just over a minute.

Krytzer recalled how, on that day in June 2012, he sat in the auction house astonished and with tears running down his cheeks.

"They had to bring over water and stuff to me and wipe sweat off my head," he said. "I started hyperventilating because I couldn't believe it. ... Everything just went limp and I couldn't catch my breath."

He added: "It was just hard to grasp. I mean, I worked hard my whole life. I was in construction, I never bought anything, I never saved, I always rented.

"I bought used cars 'cause that's all I could afford. I lived paycheck to paycheck my whole life."

Krytzer used his fortune to buy two homes, a customised Dodge Challenger SRT8 and a Harley Davidson. His wife and three daughters were also treated to a cruise holiday to Mexico.

And while money has meant he no longer struggles to survive as he once did, he still misses his working life.

"I mean, I have a home, a beautiful home, and several cars, but I'd give anything to still be working," he said. "Sitting around even if you're in a nice home or you're living in a shack, you're sitting around bored doing nothing."

Krytzer also credits his windfall with saving his life.

"I firmly believe I'm here because years ago I turned my life around," he said. "The things I've been through, I tell people it's a strong faith and a strong mind. Without those things you're not going to make it."

The blanket was sold by Ellis last year for more than $1.8m to collectors Charles and Valerie Diker.

In April, the couple pledged to donate nearly 100 works of Native American art to The Metropolitan Museum of Art in New York in 2018.

While they didn't say which pieces would be on show, it could see Krytzer's blanket go from catch-cloth for a litter of kittens to being displayed in the largest art museum in the United States.

Auctioneer John Moran with the blanket JohnMoranAuctions