It's dark now, and everyone's fully plastered and singing drinking songs, and there's nothing like the English and the Scottish for drinking songs (other than the Irish, I suppose. I think I'm going to go listen to the Pogues right now. Hey, maybe Jin's got some fantastic Korean drinking songs. Wait, where's Jin? Where's Sun? Where's Sayid? How about Rose and Bernard? Where'd everybody go?).
Now that they're well and truly hammered, Charlie says he wants to ask Desmond something. "Anything, pal," says Desmond. Charlie asks how he knew Claire was drowning. Desmond says that he heard her, and Hurley points out that they were a mile away (that far? So even if Hurley was Roger Bannister, which he's not, then it took them at least four minutes to get back to the beach, which really would have been enough time to lose Claire). Desmond says he's got really good hearing. So Charlie asks if he heard the lightning, reminding him of the lightning rod he fortuitously built just outside Claire's hut.
Desmond's had enough questions; he gets up, and staggers slightly as he leaves, thanking them for the drink. But Charlie's angry now and demands to know what's going on. "Oi! You think you turned some key, that makes you a hero?" Desmond says he's not a hero. Charlie says he doesn't know what Desmond's doing, but he knows a coward when he sees one. So Desmond freaks out and jumps Charlie, which is relatively awesome, partly because Hurley's too drunk to get up and immediately intervene; all he can offer is his most admonishing "Duuuude!" Desmond's screaming about Charlie not knowing what Desmond's gone through, and Charlie's yelling because what do you do with a drunken sailor er-lie in the morning?
We flashback to Locke and Desmond in Swan station, just after the timer hit zero and everything started going nuts. Desmond finds the failsafe key tucked into the book and hops down the trap door underneath the station, yelling, "I'll see you in another life, brother?" and underneath, making the sign of the cross and saying, "I love you, Penny," and turning the key. We get a rapid-fire sequence of images that I suppose I could watch in slow-motion so I could identify them, but I'm a lazy, lazy man.
The end result is a close-up of an eye. Desmond's eye. He's lying on his back, and his face is flecked with red, but it's much too bright to be blood, and as we pull back, we see Desmond lying on the floor of an apartment, an upturned can of red paint nearby. We can see part of the paint brand name on it: "Futu-" Nice. Anyway, we hear a woman saying, "oh my god" a few times, and it turns out be Penny, and she's bringing some ice for Desmond, who apparently fell while doing a rather haphazard job of painting this apartment. She asks if he's okay, and cradles his head. And then says, as Desmond asks what's happening, "What's happening is the result of combining ladders, painting the ceiling, and alcohol." Look, let's not jump to conclusions and blame alcohol for this. Desmond sits up. "This is my flat," he says, like he's just coming to the realization. She says if he wants her to feel at home, he might start calling it their flat. He's looking really confused and it's pretty clear -- without it being explicitly explained it, at least not yet -- that this isn't so much Flashback Desmond as Island Desmond reliving this moment. Penny asks what's wrong, and he says "absolutely nothing," like you would if you woke up from a rather confusing cryptic dream, and found you were safe in your own life. But over Penny's shoulder, as he hugs her, Desmond looks really scared. He's seen Back to the Future. He knows what can happen when you screw with the past.