One question, if the communication was down, how & when did Candle know what John was punching? Automated responses?

Second Question if this leads to all a ruse discussion.

What if the Plane crash survivors are the Hostiles that Candle refers to?

I also got the impression that before The Flame exploded Locke's pressing 77 sent out some sort of SOS or distress call. Of course there isn't any direct evidence for this, but I thought it was implied in the context. If this is true there has to be some kind of tertiary means of communication after the dish and the SONAR beacon. Whatever this 3rd means of communication is, it also was probably destroyed, but was able to send out one last signal beforehand. Does any of this sound reasonable???

I'm pretty sure the Hostiles are in fact Ben's crew.

Pretty standard automated code, IMO.

Enter number to activate [this]
..If [this] does not respond
..then tell user to enter number2 to activate [that]
....If [that] does not respond
....then tell user to enter number3 to blow up station
......Activate C4
....Else activate [that]
....End If
..Else activate [this]
End If

Pretty standard automated code, IMO.

Enter number to activate [this]
..If [this] does not respond
..then tell user to enter number2 to activate [that]
....If [that] does not respond
....then tell user to enter number3 to blow up station
......Activate C4
....Else activate [that]
....End If
..Else activate [this]
End If

What she said, and just to add - I believe it's been implied that communications with the outside world no longer work, but intra-island communication is still OK. For one thing, Locke & co. were able to get the video feed from the Flame working from the Pearl, remember?

I want to know what the option for upload station was all about. It was the second option that Dr. Candle gave right after enter 24 for a food drop. Upload station? What does that mean?

I do think the computer gave automated responses. With all the flickering between sequences that Dr. Candle gave, it looked automated to me.

The time travel question aside, I don't think that our Losties are the Hostiles that Candle refered to.