FDW=Underwater, Sayid/Ben=Temple and Eloise by Eddie Marques

There's a few theories here, so I'll go through them in best order possible.

Before watching the premiere I thought the ALT was everything that happened first (Iteration 1, if you will), but after seeing the island under water I realized that this is happening AFTER the events in Season 6 that have yet to play out on the island in 2007.

It's likely that Eloise might have moved the island in 1977. She probably was removed as the leader of the others for potentially destroying the island with the hydrogen bomb. This puts Widmore next in line and causes the two to become alienated somehow. So she is forced to go to the FDW and move the island before the Losties destroy it, sacrificing her role as leader. Widmore knows about the exit in Tunisia because Eloise moved it. We saw that Widmore was escorted off the island in a rather less epic way than we imagined, but still knows about it from Eloise.

The same thing that happened to Ben in the temple is the same thing that happened to Sayid. I don't think Jacob is in his body, cause that would be kind of lame. It would just be Sayid's shell. We already have one of those and it's Locke. It would be pretty disappointing by the end of the show if everyone was just inhabited by a demi-god or something. But I digress. Sayid doesn't remember, much like Ben didn't remember. Sayid got inhabited by Sayid, whether or not it's the Sayid from the current timeline is yet to be seen.

It's not the SWAN that sinks the island, it's the ORCHID. It's the deepest thing we've seen on the island, which means it's probably near the island core, or is the core. Maybe it was the volcano at first, then turned into it. Anyways, I think that someone, most likely Jack, will destroy it. The FDW was the MIB's tool in the game he has with Jacob to manipulate time. By destroying the donkey wheel, you destroy the time loop that is created and the island itself would either flash or sink to the bottom, leaving the person down there to flash through time in an undetermined way.

Maybe Jack got that razor cut in the FDW, even though it's a paper cut compared to how Locke and Ben got hurt. Maybe he was shaving his beard and mind flashed to 815, that part is tricky.

Ultimately the details will probably be off, but if anything sunk or moved the island, it was the FDW and not the Swan, or I'm completely wrong.