[$_DEADSEXE_$]

They are not dead and they are not in purgatory.
J.J Abrahms, DL have both stated that while they think this is a really cool idea and one they threw around...it is in fact not true. There is nothing supernatural or other worldly about the island..everything can be explained through science as they put it.
They already know what the island is, its back story, who the others are , how the plane crashed and why.

End of Season 2 I'm pretty sure will involve how and why the plane crashed...and the return of Desmond/Walt and what happens when the button isnt pushed.

They key clue to what is going on in the island is "time"...the majority of the books Sawyer read deal with time. In the old episode with Sayid being captured..originally when sayid asks rousea what her and the other scientists were studying she responded "time". Damon Lindof made David Fury remove that reference. The whispers in season 1 when slowed down and listened two are a conversation between two men and 1 women who are observing Sayid and they are arguing about whether he can see/percieve them.

Biggest secret that I think may be true

Locke's father is the same man who Sawyer has been searching for.
The Long Con that he put on his son Locke kind of supports this, Locke's dialogue about the origins of Sawyer's nickname...plus there has been mention that Sawyer and Locke share a huge secret/connection that neither is currently aware of.