It seems to me that Michael is/was being controlled by someone or something. I think it's beyond mind control... I think someone has possessed body and Michael is no more. Maybe Alvar Hanso himself?

Either way, Michael has made it look like Henry Gale shot everyone so Henry could escape. The only reason he shot himself is so he could stay with the camp... otherwise he and Henry would have both bolted out of there and he could have gotten Walt back as his reward. The only reason he has for staying in the camp is to infiltrate it, to spy on the Losties and work for the Others.

I also don't believe the Others are lightly armed and living in tents. I think that's a trap, because the Others, when not wearing costumes, are too well groomed to not be living in a hatch of their own full-time.

Hypothesis? "Michael" is dead, and another person is inhabiting his body. "Michael" will lead a "revolt" where either a bunch of Losties die, or the "battle" will be a diversion and nothing serious will happen, but the Losties will think they scored a victory. If the 2nd scenario holds true, they will "capture" another hatch, but they will actually be participating in another experiment (now a 3-hatch experiment, instead of 2). The 3rd hatch will be more advanced than than the 1st 2 (remember how basic the Tailies hatch was?) and will have an exercise of its own (not button pushing, but still a task) and the Others will remain safe in hiding, with the Losties thinking they've conquered them.

Meahwhile, is Jack's dad Alvar Hanso? His coffin was empty, and his daughter is likely on the island. Probably not Claire, but another girl we haven't met yet... or... Libby?

__________________
PIZZA?!?! Now that's what I call a TACO!!!