Kelly, who portrayed the promiscuous older sister of Topher Grace's character Eric Forman on the show for three years, abruptly left and show writers attempted to cover up her departure by suggesting she had been accepted to a beauty school.
She made a brief return to the comedy show during the fifth season, before being replaced by actress Christina Moore for the sixth.
Kelly has largely remained out of the spotlight since her departure from That '70s Show, but she hit the headlines in 2010 when she was arrested for driving while intoxicated, and again last week when she was taken into custody on a felony charge of corporal injury upon a spouse - allegations she denies.
The 42 year old has now opened up about the tragedy which sent her on a downward spiral, admitting she "lost everything" after the miscarriage.
In an interview on U.S. breakfast show Good Morning America on Thursday, she said, "I had lost a baby, and as a result of that, I lost everything. I was abusing alcohol, which I no longer do.
"With That '70s Show I was guilty of the drinking problem and I ran."
Kelly claims she has been sober for three months and insists she had not been drinking or on drugs when she was arrested: "There is nothing that I was on or using at that time. My poor mother has to look at that picture (mugshot) of me that doesn't look like me, it's not me."
And she's determined to stand up for herself and fight the latest charges against her so she can work on rebuilding her career with a new movie called It Sucks To Be Me.
She added, "This is all a bunch of made-up stuff... I am not running from this. I have paid my dues and if I can make it through this, I can make it through anything."