Interesting thread, lots of good thoughts all. I personally do not believe the event was in Desmonds head, but an actual shift or rip in the time space continuum. I think the picture was on Desmond in the hatch when he turned the key and by "fate/chance" was blown out of the hatch (along with his clothes..lol) and was lying there when the shift corrected itself and returned him to that place. I'm not sure how Penny also has a photo, or why it has distinct differences. But I do believe it to be a very significant detail.