finally watched this ep (in the UK) and have a theory for yer all:

note, some things the characters say have been passed on vocally, we don't know for sure how much of what Kelvin said whilst drunk and/or sober actually tallies with reality, for example.

- the island has a natural strong electromagnetic field, this through various means explains the inability of the outside world to "see" the island and the inability for the inhabitants to leave (Desmonds compass may have told him he was travelling west but if the compass was pointing to a point on the island rather than the north pole it would have led him around in a circle)

- the Swan collects and harnesses the EM field and stores it in a "buffer" or "reservior" this would allow in normal operation a constant and predictable flow to the power station or wherever else needed it

- the "incident" was the destruction of the power station or similar facility

- after "the incident" the island and it's facilities fell into disrepair, but the Swan continued to operate, with no power station to pass the collected EM power onto the EM energy collected needed to be regularly vented ... the countdown timer is a representation of the capacity left in the EM "buffer" (though it originally could have been a dial with a red section at one end), the alarm to warn if during normal operation the buffer was getting full and needed venting. the vent code was needed to prevent malicious tampering with the carefully balanced EM capture and delivery system

- the failsafe would shut down the EM collection system. It would need a key belonging to an authorised person as this would result in the total loss of the islands supply of EM energy. the resulting mass venting from the swan's collection and storage system is what caused the bright light, however the vents may not necceserily be right under the swan, just nearby, so an explosion may not have occurred.

- now that the failsafe has been activated the swan performs no function, as the energy is no longer collected, the island's EM field has been naturally redistributed

- desmond has a tracker, presumably in his charles dickens book (or more tenuously, in the Elizabeth), which could not be "seen" due to it's proximity to either the swan or the island itself. now that the island's EM field is uniform and not concentrated at the swan the tracker can be seen, as the Earth's EM field meets at the poles these are the natural places to house a global tracking station

- the false alarm occured during the 22nd Sep 04 system failure

- the hatch door fell out of the sky as it was blown there, not by an explosion but by the polarity of the systems in the hatch reversing. The only damage Locke and Ekko would have suffered apart from dizzyness and nausea would have been from all the pots, pans, knifes and washing machines that may also have been flung in the opposite direction

- as for the various illogicalities of the facilities it could be that Mr Hanso was a bit, shall we say, eccentric (see the history of England's Longleat safari park for one prime example of a real life nutter). hence the reason the swan station isnt automated and even then needs a code and not just a big red button. why the pearl is utterly pointless and the infinite supply of tubes and journals dump into a field. Why the door facility is actually just a door. Obivously someone with a lot of money, resources, an island and a few baskets short of a picnic.

- obivously there are a tone of other things, like the smoke monster(s) to address but that's for another thread