Again though, Owen's theory does NOT make sense, because none of the places Squall visits in the future are places where he can technically exist, so it makes no sense that he can survive in one such era but not another. This is what we can infer happened in the ending:

Squall was lost in a weird time-warp, a remnant from time compression which was in the process of unravelling. This time-warp was reacting to his feelings, emotions and memories (as Laguna states, feelings and thoughts are what determine what happens in such a time-warp thing, hence how the party get to the future; they concentrate on getting there and use their feelings for eachother to stay together), and as Squall was still not completely out of his 'lone wolf' attitude, he ended up alone.

Unable to get out, due to his continuing inability to really place faith in his friends and Rinoa, he gets more and more frustrated and depressed. This makes the landscape form first a vast, barren desert, while then changing to a tiny island (because at that point he gives in to the idea that he'll never escape). He starts thinking about Rinoa, but due to his feelings of hopelessness and despair etc. the time-warp produces only twisted images. Eventually, this exhausts him such mentally that combined with his already physical weariness, he collapses/faints.

Rinoa uses her love for Squall to find him, and wakes him up (after first thinking that he's dead). Then, using the 'power of love' (gotta love the corniness!), they are able to escape the time-warp together, both sound and safe.

That's it.