In 'across the sea' we finally find out how the smoke monster comes about (albeit in the most obscure and unsatisfying way possible).
In this theory, I'll assume the following happened, as it was shown: MiB was exposed to the most intense amount of exotic matter on the island possible and absorbed it, literally turning him into this evil sentient cloud.
To me, this was unsatisfactory as it completely contradicts everything we've seen this 'matter' do in previous episodes. Mostly, it fucks around with time and space; dislodges you, physically transports you, and moves the island.
Then I thought: what if the same happened here with the monster? Only - - in the most extreme way possible. Yes, I am proposing the smoke monster is MiB, but dislodged ENTIRELY from space and time. With this, you become almost a god; scanning brains, flying about, bending time. The only downside (the one which makes it worse than death) is that you lose your humanity.
Now let's expand: the sickness. In LA X, Sayid Jarrah is 'claimed' or 'infected'. By what, we ask? 'Evil' is the answer Dogen gives us, God rest his soul.
We can accept this if we want to, but like many of the answers we're getting, I just feel it was unsatisfactory. What is 'Evil'? How does 'Evil' infect? I'm not looking for midichlorians here, writers - I just want something that fits into the broader framework of the show.
'Evil' as it stands, is exactly what Dogen also tells us MiB is an 'incarnate' of however. So what we can assume is that the 'spring' in the Temple is directly tied to the exotic anomoly of Across the Sea (perhaps the temple is built on top of it) and as MiB explains, the water 'channels' this energy somehow (a little silly, but what ya gonna do?).
So far in LOST we've been presented with two kinds of sickness, and I think I've finally figured them out: 'Time' sickness, and 'Space disassociation' sickness is what I'm calling them. 'Time' sickness happens in Cabin Fever, and The Constant - - it embues its infectee with timelessness. 'Space disassociation' sickness on the other hand, takes your higher levels of consciousness (empathy, reason) and makes you easier to manipulate. As we see all throughout S6 Sayid isn't 'evil' per se, just completely dead inside; manipulated by Dogen, MiB, and even Desmond to some extent. To be dislodged from 'Space' is to become a walking husk (or to physically teleport away from the island if it doesn't get inside your head).
The smoke monster is the two sicknesses embodied it seems. Not only is he timeless to the island, but he seems to have little occupation of any actual space any more. People rarely touch him, and when they do it just seems 'wrong'. And when you stab him, he doesn't bleed. And what of empathy, or compassion? As we see in 'The Candidate' he has none.
So, wrapping this up- "Every man has a bit of the light in him." What does this mean? Well, put in 'exotic matter' terms - - every man occupies time and space. To encounter the 'light' is to transcend your naturally born limitations, which I believe every island inhabitant has done to some extent. Hey! They're all drinking the same water right?
Too much exposure of course makes you sick, as we've seen. Take enough of the light? "Every other light in the world will go out"? If you fuck around too much with space and time too much, in the end you're going to hit a paradox (jughead). The world's going to end and that's that. And who has been orchestrating these time travelling shennanigans all along? Only the sickest man on the island.
One last thing: why can't a timeless, spaceless black cloud leave the island? I'll propose this one idea (one that doesn't deal with 'Candidates' nonsense I believe to be a red herring) - - he cannot exist outside of the island. Everything we see, outside of the island's radius flows smoothly. This is why, when you leave the island, you always end up coming back one way or another. You don't belong in the linear world any more; you are a part of the island. A 'fool enslaved by time and space'.
Now let's expand even further:
ALT UNIVERSE
Island-free, as we've seen. The survivors exist no longer enslaved by their spacetime transgressions - or do they? I think these leaking memories are a actually more of a curse than anything: the island has a hold of them still, even from across the fifth dimension.
GHOSTS
Space disassociation? Time disassociation? What happens when the consciousness tries to occupy a space it has no business occupying?
As for the ability to 'see' ghosts: another symptom of this catch-all 'space' sickness I believe. You have the gift of seeing something you really shouldn't, because its existance is a violation.
JACOB, MOTHER AND RICHARD
One thing in common: all ageless. Enough exposure to that energy should do that to you. Not ageless actually, but existing outside of the linear flow of time; you can literally break the rules of entropy by existing as your own constant. And I think the exact same thing happened to the compass in season 5.
RULES
There are none. 'I made it so you can't hurt each other' was immediately followed with Jacob pummeling the shit out of his brother. The only rules in this game are the natural limitations of space and time, which hey presto! we can loop-hole with the right amount of abuse. Why can't the monster cross the ash? The same reason why he never attempts to kill the candidates: because he believes he can't. He really can though.
THE END OF IT ALL
In the end, I believe a twist will happen and it will be this: the Alt universe, as an epilogue will end with our Losties collectively pulled back to the island. They exist there, because they have always existed there. No escape. The show will start over, and they will awake once again on the island. 'Loop' dude, 'loop'.