We see that Locke is introducing a grenade-less Miles to the rest of his camp. "No more secrets" the bald one vows, as everyone learns that Miles and his shipmates have come to the island to capture Ben. That's old news, says Hurley. Oh yeah. They also have orders to kill everyone else. Ben also 'fesses up that Michael is his spy.
Back on the boat, an alarm wakes up Sayid and Desmond. They rush to the deck to find Captain Crunch Gault is beating the beejeezus out of one of the crew members who was trying to skedaddle in the zodiac. Captain Gault reminds them the fate of the last two people who tried to flee the boat. Methinks it didn't end well...
On the island, a concerned Ben gives Alex, Rousseau, and Karl a map to "The Temple," where Ben says they must hide if they don't want to be killed. Ben says the rest of his people are already hiding there. Surprisingly, Rousseau thinks it's a good idea and the trio set off.
On the boat, Desmond and Sayid corner Michael and demand to hear how he wound up on the boat. Here's where we are treated to an extra long flashback and some of our lingering questions are finally answered.
You see, Michael made it back to the good ol' U S of A. He doesn't seem happy about that, though -- he's probably not a Red Sox fan. Anyway, he writes out and pins a note to his shirt because he is driving his car into a wall. When he wakes up in the hospital, he is none too happy to learn he's still alive, but he is also none too happy to see Libby -- yes, the Libby he murdered -- is his nurse. Okay, that's just a dream, but they're obviously trying to play up Michael's guilt with this.
He gets out of the hospital and goes to his mom's place, but she won't let him see Walt. Apparently she's been hiding the fact that her son is back. After a token appearance by Walt in the bedroom window -- a la Norman Bates -- Michael goes to the pawn shop and trades Jin's watch for a gun. He goes to a back alley and right when he's about to pull the trigger a (Mr.) friendly face -- Tom -- stops him. Michael attacks him and they fight for a bit before Tom pulls a gun and says "You can't kill yourself. The island won't let you." To prove it, Tom gives him the gun and asks him to come to his hotel penthouse when he's ready to talk.
Michael, back at his apartment/hotel, repeatedly pulls the trigger but the gun won't splatter his brains, even though the chamber is full. Also: while he's trying to off himself, the news breaks that they have found the wreckage of Oceanic 815. He goes to Tom's apartment -- interrupting his date with Arturo and Tom gives Michael the rundown on Charles Widmore, including showing him how he obtained the "bodies" of the Oceanic 815 passengers (a handy cemetery in Thailand) and the receipts showing how he bought a plane. Tom tells Michael to go undercover on Widmore's boat that is searching for the island. You want to redeem yourself for what you did? Tom asks. "You're going so you can kill everyone on board."
Michael heads to Fiji, where he introduces himself as the new deckhand, Kevin Johnson. He meets some of the crew members -- including Minkowski, Naomi and Miles. There's also a "care package" waiting for him on board.
They leave port, and soon after Michael, er Kevin, er Michael stumbles across Gault and some of the other crew having a little target practice. Michael opens his care package and finds a bomb. He plants it in the engine room, but before he can press the detonator Libby appears and tells him "Don't do it" -- or at least that's what I think she said. He presses it anyway, and after a countdown from 10 we find out it's a dud -- a little flag pops up with the message: "Not yet."
A while later, he gets a call on the radio from Walt, which is impossible because he threw his cell phone into the ocean and tells Minkowski that no one knows he's on board. But it's not really Walt on the other end, but Ben on the island, who explains the reason the bomb was a fake is because there are innocent people on the boat and he doesn't kill innocent people. Ben wants him to sabotage the radio and engines so they don't reach the island; which, of course, we know he does.
The story finished, instead of thanking Michael for saving his life Sayid brings him to Gault and identifies him as a traitor.
Back on the island, we find Rousseau, Karl and Alex in the jungle. Says Karl: "I have a bad feeling about this," which, if you've seen any horror movies, is sign #8 that he's about to die. Almost on cue, what appears to be a sniper mows down Karl! Rousseau and Alex take cover. When Rousseau tries to lead Alex to safety, she gets shot too. Alex trembles for a few seconds behind a tree trunk before standing up and screaming that she's Ben's daughter.
Smash to black.