I think it's a trap, too. I think it's a little weird how he detailed everything to Jack and Locke... It almost makes me think he was saying it hoping "someone" was listening and would go set up an ambush, then trade AL, Charlie and Sayid for Henry. (Like Henry had come up with a plan and was trying to convey that plan to the Others.)

I also think something will happen when they find the balloon because we saw in the preview that it's raining when they find it. It seems like it's almost always raining when something bad happens to the Losties.

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"Not all who wander are lost." - J. R. R. Tolkien

"You cannot live a perfect day without doing something for someone who will never be able to repay you." - John Wooden