Remember in the movie The Sixth Sense how the shrink, in denial of his own death, created a false reality and carried on until he was forced to acknowledge and accept that he had, in fact, been killed? I think that for the Losties in the sideways flash there is something similar happening. Christian Slater said that they created that place in order to find one another. I think the sideways flash is a concocted (with some help from Elanor) reality, and that when they realize this they leave it; but not for a new place, but just to return back to where they should be, which is the island.
So in my understanding, the Sideways Flash Reality is canceled out, and the Island Reality is real. Which leaves Jack and Ben and Hurley and Rose and Bernard and the dog on the island, and Miles and Sawyer and Kate and Claire and Lapidus and Richard (no longer immortal) flying away. And pretty much everyone else is dead, most of them from blowing up or exploding. Wait, where's Desmond? I don't recall.
Interesting how pulling that plug out of the mysterious light sort seemed to cancel out Richard's immortality and Smokey's invincibility.
So many questions left unanswered . . . here's one, just for fun:
Isn't the statue on the left the same one that Mr. Eko's friends stuffed with heroin? And what was Smokey up to when he was inhabiting Eko's brother and moralizing with him? Just sporting?