When Tony returns home from captivity by the Ten Rings, he begins working on a refined version of the Iron Man (armor) called Mark-2, then the completed Mark-3 once it's discovered that the predecessor armor couldn't handle flying at high altitudes.
Tony gets drunk on his birthday because he knew he was dying by the Palladium. To stop it, Rhodey puts the Mark II to confronts Tony, who was wearing the Mark IV. The fight threatens the guests who flee to avoid being injured.
After the Chitauri invasion, Tony locked himself in his mansion and started building numerous suits. Later, Stark defies the Mandarin to confront him personally. The response of the Mandarin was an attack on the Stark's house, causing the destruction of the mansion.