In one of the previous episodes from season five when we see under ‘The Temple’ there is a wall with a picture and hieroglyphics on it. It is right above the vent where Smokey comes out of. It showed a painting of an Egyptian God (the same as the statue) battling with Smokey. Good vs Evil. My theory is that Jocob is the good and represents the God in the statue, thus he lives in the statue. The man we saw talking to Jacob in the start of ‘The Incident Part 1’ is Smokey and represented in the painting. As we know Smokey can take on the form of dead people, like Eko’s brother Yemi. He is the one who took on the form of dead Locke. Now Smokey has found his loophole and killed Jacob, so everyone on the Island better watch out!
