I just watched the Flame scenes again. Mikhail swears to Sayid that everything he has told him about his being on the island was true...accept that he never worked for the Dharma Initiative.

WhenMikhailexplained that he answered an ad in the paper and came to the island, it wasn't to work for Dharma. He never mentions Dharma at all accept for his lie that he was it's last surviving member. I think he was recruited by the same group that wanted so badly to hire Juliet...and it wasn't Dharma.

The Flame was the communitcations hub of the Dharma Initiative. Before the
"Purge" with the hostiles, it was wired to expode if it fell into the hands of the Hostiles, by some sort of automated system (Lockes beating the chess game was a manual override). The Dharma Initiative was defeated during the Purge and the Flame station was captured by the hostiles. They put one of their own, Mikhail, there by himself to keep the lines of communications with the outside world open, and pretend that Dharma was still in control and functioning so that food and fuel drops continued. Mikhail obviously lived there by himself for a long time, impersonating Dharma if he needed to.

When Desmonds Hatch blew up, communications ceased to function (Tom admitted that to Jack). Miss Klugh was sent by horseback to check on Mikhail's situation, which is why she wasn't at the Hydra station labs. She was still there when Locke and Sayid found them.

It still leaves a lot of other questions open, but I think its pretty clear why Mikhail and Miss Klugh were there.

So would that imply that Klugh is a hostile? That might be a big clue in the "Others are not Hostiles" debate.