In Greek mythology and other cultures, there are stories about the heavenly gods coming down to Earth to mess with the human population. Sometimes, these gods mate with human females, creating a hybrid off-spring which other gods try to eliminate. These demi-gods have half human and half-god like traits. They may have magical powers, but still be mortal.
Under the background of these stories, the off-spring are usually hidden away from the gods in order to protect them from destruction. Sometimes they are banished by the gods to a faraway place so their mere presence will not upset the gods' rule over humanity. At times, these off-spring are cursed by the gods so they could have no human interaction, such as the ability to turn men into stone.
As such, these stories may be relevant to the island guardian. The ones we have seen, like Crazy Mother and Jacob, appear to be immortal, with magical powers but yet have the ability to die under certain circumstances.
Perhaps, the initial island guardian was a demi-god, banished to this remote island. One of its magical powers is the ability to turn human beings into smoke monsters. With the essence of human souls trapped in smoke form, they would be trapped on the island prison with their host, the demi-god.
We saw the smoke monster take many human forms. However, that does not eliminate the possibility that there were more than one smoke monster on the island. The whispers, the trapped souls who have no physical form, may be like cloaks that a smoke monster absorbs in order to create a human form.
What damage does one do by banishing a supernatural being to a deserted island to live their eternity alone? You try to find loopholes in order to bring things to the island "for play." Jacob was all about playing games; and his manipulation of Alpert to Ben Linus was all a part of an elaborate game that Jacob made up the rules as it went along. In one way, this may be a childlike game of "tag." Jacob was looking to find a person to be "it," the new guardian, so his prison sentence or banishment would be over.