My guess is that the "powerful people" that have been hinted at back on the mainland were called in to fake the plane crash. They made it appear like the plane went down and all aboard died to remove the chance that a search attempt would find the island. That explains the "all dead" story without any wierd ghost story stuff.
Though that kinda implies that the "you get to go home on the sub" or "you get to take the boat and leave" exit plans for the island have a not mentioned, backup, you also die on the way out from our assasins sorta plot point. Doesn't bode well for Michael but hey, who really liked him anyhow!
Next couple of episodes look to have much potential... can't wait to see!
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