This isn’t much of a theory, but I don’t think anyone has actually fully defined it, so I’ll try to do that, and provide some history.
Hurley has had a very tumultuous life, he was involved in an accident that resulted in some peoples death, this drove him to apparent insanity and he was put into a mental institute. In the mental institute he formed a friendship with Dave, an imaginary friend. After finding out Dave was imaginary Hurley made a psychological breakthrough and was allowed to leave the mental institute.
He he got back to his life, made two friends, Johnny & Starla. I believe that these two characters are imaginary too (see here). He won the lottery and as a result he was cursed. His friends ran off together, and his family and life was plagued by terrible events. He eventually went to track down the source of the curse, crashed on the island and things got progressively worse. His potential girlfriend, Libby, died, his best friend, Charlie, died. He left the island, leaving more of his friends.
He got back to the real world only to be driven crazy by the lies he was forced to tell. He voluntarily went back to Santa Rosa, the mental institute. There he started to see his dead island friends.
A strong case can be made for the insanity of Hurley. He sees imaginary people, he has been in a mental institute twice, he believes he’s cursed, he sees dead people, and in general, he’s a little odd. But I think that many Lost fans would be willing to say the Hurley isn’t crazy. So then what’s wrong with him? There has never been a consensus as to what’s going on with his character. Season four hints that Hurley is very special, his character is the driving force behind the premiere, he is able to see Jacob’s cabin and he’s one of the Oceanic Six.
I believe that Hurley can see and communicate with dead people. It’s as simple as that. This is not unlike the way the Miles can sense and hear dead people. This may not seem like new, but it’s important to differentiate between crazy and gifted. If Hurley is crazy, then he’s just a funny side character on the show. But if he’s gifted, then he could very well be one of the more important characters, up there with Ben, Locke and Jack. I also want to say that this is a power, many people in Lost see dead people, but that tends to happen on the island or at least after they’ve been to the island, I think that Hurley has had this power for a long time.
So those imaginary people; Dave, Starla and Johnny; are, according to this theory, dead people. I am assuming that Hurley knew them at some point in his life. If we were ever to see what had happened when that deck collapsed I wouldn’t be surprised to see those three there. Perhaps he feels, and is, responible for their death so that’s why they haunt him.
The fact that Hurley can See Jacob is also pretty telling. Hurley attempted to come up with a theory as to why he and Locke could see Jacob, he said “because we’re the craziest”. If we don’t think that he’s crazy, then what is he?