Awesome theories Deevo, I think you're onto something. I was thinking while I read it and there's one thing I disagreed with.
I have always believed that there is a bubble or field around the island. But it seems as though the "exotic matter" is not only the source of this power but also a great variety of other effects. My thought is that a simple balloon design is too simple to explain all the phenomena we've observed.
I only say this because I had this ridiculous sketch of the island surrounded by a field shaped like a wrapped piece of candy. The more I thought about it, the more it made sense. It was based on a drawing in a book by Carlos Castaneda, in which these really old wise Yakui sorcerers down in Mexico described the way a human really looks, in its "energy" form. It's like a big glowing egg with a million little fibers connecting it to everything in the world. The fibers all connect where the neck would be, if it wasn't an egg, and in that spot lies the capability to see the ends of all the fibers, which they say are connected to different "dimensions of causality". I think this is the same effect that the "exotic matter" has on the island.
There are these places called "spiritual vortices" all around the world, in Arizona I went to a few. They're alleged sites for accumulation of geophysical forces unexplained by science. Most people think it's just new age weirdness, I dunno, maybe so. A lot of people in those areas truthfully insist on its significance, though, and I'm inclined to believe.
I made a theory based on this, and on the gravitational "hot-spots" scattered all over the world, including one in California called The Mystery Spot, which has been debunked officially of course. (Although I personally know there's something weird going on there)
My theory has the island encased in a spindle structure, connected on both sides to many "vortices" or line of energy that contains matter we can't understand, or exotic matter. I picture it as a bundle, a grouping of lines in convergence that causes that matter to be in a constantly exited state. The compass reading is in line with the island's spindle arm on one end, and space as we know it is warped so that on the other end, the compass reading is only twenty degrees off. Think about it, Michael and Walt left off the dock, and Faraday went straight from the beach. It can't be the exact same opening. I think those places are opposite to each other and that the two entrances to the island's interior environment are how the island moves.
I think the wheel turns a huge room full of gears that motorize the island and literally shift it in space/time down one of the infinite vortices it's connected to. But all this just came from the candy-wrapper drawing, so...I dunno.

PS. Sorry bout the novel, but it seemed to be the theme of the thread lol.
Also, for those of you who haven't already, look up Carlos Castaneda. He was an anthropologist that studied sorcery and related phenomena in Mexico, and I definitely think the creators of Lost have read his stuff.