I haven’t posted a theory on this site in a while, but that’s mainly because I can never think of anything good or interesting. I think now though, I have. I apologise if this has been posted on a similar level already. Feel free to let me know of any similar theories to this. 🙂
I think the events that are happening with Desmond and his going from 2004-1996, are very similar to those in the film, The Butterfly Effect (one of my favourite films!).
I think that when Desmond went back to 1996 those events did actually already happen, but like Evan in The Butterfly Effect he’d suffer ‘blackouts’ at a certain point when he was coming back from the future.
So, the whole story of Desmond going to see Daniel in 1996, going to see Penny’s father, going to see Penny herself, all those events I think did happen anyway, it’s just that Desmond suffered ‘blackouts’ whilst these events happened.
Isn’t it true that Desmond got kicked out of the Army? Could it be because he’d suffered these ‘blackouts’ and couldn’t remember what had happened to him, therefore the Army saw him as unfit to carry out his duties?
It does also explain why Penny has been looking for Desmond for 3 years! (We already know Penny was looking for him before he went back to 1996).
And the reason Daniel may have forgotten his encounter with Desmond is because of all the radiation his head has been exposed to – it’s bound to have some sort of effect on him (i.e. forgetfulness!)