This is a very long explanation, but I tried to cover as much as possible.

My explanation of LOST

Understanding the entire show is all about putting the different pieces together to
form coherent narrative. This is the picture I formed and I figured I would share it
with you. Hopefully, it provides answers about many of the mysteries and why the
show ended the way it did.

First, a couple of things about the show. It is very much about the human struggle
with the duality of our nature. We are capable of both good and bad things. It also
employs a narrative structure of looking outside in. Even the people you know the
best in your lives, you only see a fraction of what their real experience is. Thus, in
many ways, we are seeing a fragmented narrative that doesn't always provide us
with the full picture--just like life.

What is the Island?

The Island is "the Source" of energy that makes us human. It's basically the
junction point between the physical and spiritual world. The energy is what gives
us our soul and makes us human. The energy itself is like the Ying and the Yang.
It's neither completely good or completely evil. It just is. Jacob described the Island
as a cork that keeps all the evil from overwhelming the rest of the world. If you look
at the yin/yang symbol, it essentially serves as the dividing line between the two
sides that keeps them in balance. Due to proximity to the source, the island
exhibits weird behavior, such as extreme electromagnetism. It also allows people
to heal faster and age slower. The island keeps the energy in both a physical and
spiritual sense in balance. It exists at the crossroads of spiritual and physical
reality, hence why it moves. This is also why it's so difficult to find it. In quantum
mechanics there's something called "quantum entanglement". Some physicists call
this a "spooky" concept due to the way it defies assumptions. Essentially, two
particles become entangled and can influence one another's behavior even when
they are separated. It is thought that maybe they are influencing one another in a
dimension that we do not see. Either way, the island exists in both dimensions we
can and cannot see, thus giving it the appearance of moving.

It helps to keep in mind that matter is essentially energy. We are all made of
energy. The island is simply a balance barrier for a certain type of energy--the
energy that makes us human and gives us a soul. As Jacob's mother noted about
the light, everyone has a small amount of the energy within them, but most people
want more.

Where did the temple and the statue come from?

Likely, a similar narrative has played out on the island throughout human history.
The first civilization to find the island were the ancient Egyptians. They thought it
was the source of life and thus put a statue of Tawaret and built the temple.
However, likely, someone tried to harness the light for their own purposes and
someone had to protect the source from them. They eventually died and more
people came. With each wave came a new protector. The protector was the one
who protected the source of life from outsiders coming and trying to use it for their
own purpose. Much of the symbolism on the island is related to the circle of life.
Even the fact that there are really two islands, is symbolic of the nature of
procreation.

The light is the source of consciousness and what binds us to both the physical
and the spiritual worlds.

It is what gives sentience to people and makes us conscious. Only the protector
can actually harness it in a way that gives them seemingly mystical powers. Thus,
Jacob has the ability to make the rules and give Richard Alpert eternal life, and the
MIB has all kinds of crazy powers. Also, since in physics time and space are bound
together Jacob has the ability to foresee what will happen. This is because all the
forces are balanced and bound together.

The protector is bound to the source.

This is what actually creates the situation that drives the narrative of the story.
Usually the protector embodies the balance between the good and bad side of
human nature and consciousness. This is why Jacob's/MIB's adopted mother is
capable of both being a nurturing mother and a viscous murderer. However, when
their real mother comes to the island and unexpectedly gives birth to twins, the
central conflict is set up. Jacob's stepmother sets up the rule that they cannot kill
one another. Due to the connection between the twins, when Jacob takes up the
mantle of protector, they are actually both bound to the source. They cannot kill
one another due to the rule their mother set out and they cannot kill themselves
based on the rules set out by the source. When Jacob kills his brother, he violates
the rule set out by his mother and by the island since they are both bound to the
source. Thus, when he kills him, his energy remains and is in fact amplified when
he goes down the well into the source. He becomes the pure incarnation of the
darker side of human nature. This is also why Jacob does not disappear and move
on after Ben Linus kills him. Both Jacob and MIB are tied to the source and cannot
move on until either both are killed or the source is put out. Furthermore, the point
of the protector is to guard the source from outside forces. Neither Jacob or the MIB
can actually go into the well and unplug the source themselves. This is why Jacob
can leave the island without fear that his brother will simply pop down in the well
and extinguish the source himself.

The candidates

It is implied that there are actually 360 candidates as shown in the lighthouse. This
is again a symbol of the circle of life. The reason there are so many candidates is
because in order to complete the circle of life, the new protector will have to
actually destroy the MIB. Essentially, Jacob knows that the MIB will eventually find
a way to kill him, but that whoever replaces him will also have to kill the MIB. This
is no easy feet due to him no longer have a corporeal form. Thus, the need for so
many candidates to begin with. With this cycle, it's not just as simple as guarding
the source. Since both Jacob and MIB are bound to the source, they both need
someone to unplug it, as they cannot. However, the MIB needs someone to do it so
he can leave, whereas Jacob needs someone to do it so that they can kill the MIB
and complete the cycle.

The reason Jacob puts so many of the candidates through hell, is to prepare them
for what they have to do. Meanwhile, MIB is manipulating them to destroy one
another and the island. The dharma initiative nicknames the smoke monster
cerberus. Cerberus was the guard of Hades. Usually, the protector is both the
sides of the equation, but due to the dichotomy between the two, the MIB becomes
the incarnation of only one part.

No one has all the answers

One of the running themes of the show is faith versus science. I believe that no one
really has the answers. Jacob doesn't really know what the source is anymore than
he explained. The MIB doesn't exactly know how to get off the island or what will
happen when you pull out the cork. Both characters know more than the Oceanic
815 survivors, but are also in the dark about many things. They are acting on faith
and basically guessing. They just understand that light is the source of the
struggle.

Time Travel, Moving the Island, and why people can't have babies.

As I noted before, the island is like a junction point between the physical and
spiritual worlds. Time and space are bound together and by manipulating the
energy at the source the island moves. The MIB explains that the wheel is meant to
redirect and focus the energy. That is why when Ben turns the wheel, the island
disappears. It's because he's redirected the energy. Imagine it like a laser pointer
and turning the wheel simply focuses the beam somewhere else in both time and
space. However, Ben fails to turn the wheel correctly and like Daniel Faraday says,
it becomes like a skipping record. It keeps moving around in both time and space.
The people jumping through time do so due to their proximity to the source when
the wheel is turned, or in Jin's case due to his role as a candidate and his
connection to the energy.

When the Losties decide to try to get themselves back to the present, they drop an
h-bomb down the well. However, Miles asks them to consider they might be the
ones who actually caused the incident in the first place. Thus, either the h-bomb
detonated, causing the incident in the first place, or the energy they drilled into
caused the incident sent them back to the correct time. Basically, turning the wheel
sent them back in time, but the counter force of the incident sent them forward in
time. In truth, nothing different happened. The incident is always the incident.

The incident is also why people can no longer have babies on the island. We
know that both Miles and Ethan were born there and their mothers didn't die. Until
Claire came to the island, no one was born there. I also believe that Miles birth on
the island is what gives him his powers to hear the dead. It's because he was born
so close to the source of life. Either way, women cannot have babies because of
the energy surges caused by the incident. They all die right around the time that
the part of the brain develops that scientists believe is the source of consciousness.
These surges are controlled by keying the sequence in the hatch. It serves as
pressure release mechanism. The imbalance of the energy, overloads the brains
of the developing babies, killing them and their mothers.

When Desmond hits the failsafe, he absorbs a huge amount of the energy at the
source. During this period he is close to Charlie and that is why suddenly he can
see his death. Desmond absorbs a small amount of the source and is bound to the
closet person to him at the time.

"We're the good guys"

Ben says this at the end of the second season. In truth, he's sort of correct. The
others are essentially the people who carry out Jacob's dirty work. They are the
ones who do the dirty deeds for the good side. Think about angels. While they
seem nice in thought, if you read the bible, they are essentially God's hitmen.
Normally, the protector would simply do this himself. However, due to the
dichotomy of light and dark between Jacob and the MIB, Jacob cannot do this stuff
himself. He needs others to do it for him, since he cannot harm others. He seems
to only be able to give life, not take it.

The plane crash

Jacob understands that eventually Desmond will stop pushing the button and
influences the candidates lives in such a way that they remainder of them end up
on that plane. While it seems like they all end up there by accident, in truth the way
they get there and the way they have to struggle to survive is all planned by Jacob.

"They're coming"
Jacob understands his brother will eventually find a way to kill him. Also, he
understands that this needs to happen for the cycle to continue and to set up the
final showdown that will result in the destruction of both of them. He wants to die.
For his mistake to be corrected and balance to be restored, he needs to die. All the
events were set in to motion as soon as the Twins are born and Jacob eventually
murders his brother. The whole story is about him trying to correct the mistake.
However, he knows that he needs to die in order to set up the circumstances that
will allow the new protector to kill his brother.

Strange phenomenon and unplugging the source

Much of the strange phenomenon on the island can be attributed to its proximity to
the source. That's why the spirit of dead people walk around the island. They are
in close proximity to the junction point between the physical and spiritual worlds.
It's also why some people on the island exhibit strange powers such as Hurley and
Miles.

The source itself represents both life and death. When Jacob says that it acts as
cork, keeping the evil at bay, he really means that it keeps the forces of life and
death in balance with one another. Since MIB's power comes from the source
itself, once it is unplugged, he becomes mortal again. MIB leaving the Island is not
what destroys life, but how he has to do it. Both MIB and Jacob have to die in order
for the cycle to continue and the protector role to be passed on. Unfortunately,
since they are bound together and the MIB has no corporeal form, this is difficult to
do. Thus, the source has to unplugged and replugged to fox the problem of them
being stuck. The metaphor for this comes from the interaction between Juliet and
Sawyer.

Purgatory
The sideways flash has nothing to do with the incident or the H-Bomb going off.
The cycle of life is about relationships. It requires two people to create life and
thus, relationships are the crux of the story. The reason they are all need to find
one another and move on together has to do with the importance of their
relationships to one another. Their time on the island was the most important and
defining time in their lives. Throughout the series you hear the line, "Live together,
die alone." The point is that they don't die alone. They move on together.

The reason they live different lives in their sideways flash has to do with them
having the opportunity to correct the mistakes they made in their lives. Jack had
issues with his father, so he has the opportunity to become a good father. Sawyer
was a criminal and became the same thing that caused him so much pain. So, he
becomes a cop. Miles is similar in the sense that he also was a con artist. Kate
never helped people in the right way. Thus, she gets the opportunity to help Claire.
Claire felt bad about wanting to give away her baby, thus in this place, she has
doubts. Sun and Jin stayed in the point of their relationship where they still loved
each other. Hurley felt lucky for the good fortune he received and used it help
others. Sayid felt guilty because despite his love for Nadia, all he did was cause
her pain and suffering. Ben Linus did many despicable things and in this life he got
to live a more moral life. Basically, look at all the things the characters end up
doing in their real lives to cause them so many problems, and in purgatory they
chose to live a different way.

It also should be noted that they all died at different times. Many of them died long
after Jack, but as Christian notes, there is no here or now. This is implied by Hurley
telling Ben that he was a good number 2. They were on the island for many years
after the events of the story. This place is in the source and beyond time and
space.
Why we didn't get the whole story.
When boiled down, LOST is about Jack's journey and the relationships around him.
If you go back and watch LOST from this perspective, you are really only seeing
Jack's story. It is his circle of life and about his role in correcting the imbalance on
the island. That's why he ends up right back where he started in the opening
scene, lying in the jungle with Vincent.