Tony Stark is a genius inventor and business mogul whose keen intellect managed to allow his company to survive even the Great Depression, though not necessarily the most ethical.  His company sold weapons and supplies to Japan, who over the last few years had begun assaults into Manchuria and taken control, renaming it Manchukuo.

In 1932, Stark took a business trip to Manchukuo to personally consult with and congratulate the General on his success.  However, during his visit, they came under fire from surviving rebels of the Manchurian army.  They had stolen a cache of weapons designed by Stark Industries.  Tony was injured in the attack and taken prisoner when they discovered that he was the one who had built the weapons they were using.

They managed to keep Stark alive, but the surgeon, who was also a prisoner, told him that there was a tiny piece of shrapnel lodged too close to his heart for him to safely remove.  It wasn't life threatening at the moment, but blood pressure would eventually shift it towards the heart, killing him.  After he recovered, the Manchurian rebels tried to force Tony to make more weapons for them.  For awhile he showed them just enough progress to keep them from killing him, but in the meantime had been working on a way to prevent the shrapnel from moving towards his heart.

Tony was well-versed in the theories of Nicolai Tesla and modern scientists.  He often improved on their concepts or was well ahead of them already.  He would eventually need a power source that wouldn't deplete, but for the time being he managed to create a type of electromagnet attached to a chest plate he could wear.  But that also gave him the idea of creating plated armor to use to escape.

On the day of his escape, Tony had mounted a grenade launcher and machine gun to his makeshift suit of armor.  He and the Japanese doctor escaped in a fantastic display.  Upon reaching friendly territory, shouts went up through the camp of 'tetsu jin!' and once again, the doctor saved him by explaining their situation.  Later, Tony asked the doctor what they were shouting, and he thought for a moment before translating, 'Iron... Man?'

After returning to the states, Tony underwent a major change of world view.  He immediately stopped manufacture and sales of weapons and instead rerouted those resources to more humane efforts and started an organization to help those hurt worst by the Great Depression.  However, in his private lab, he continued to refine the magnet that kept him alive and redesigned the suit to something more reasonable.

Imagine suit in dark red and muted gold until I get work some photoshop magic