ELI5: where are the 800,000 btc, and how were they stolen. Don't be elitist. Tell all of us plebs how the theft occured, and where the stolen coins are, or stfu.
Is this directed at me?
If so, I fail to understand what your problem is. Bitcoin doesn't work the way the author of the post you linked to appears to believe. There are literally dozens of threads on these forums that explain what transaction malleability is and how mtgox might have been tricked into paying users multiple times.
I gave you a link to one of those threads.
Explain it like you are 5? I'm sorry, unless we're talking genius-5-year-old, that's just not possible. That's not being elitist, that's being a realist. Try reading the thread I linked and ask any questions you have after that.
The tl;dr version for 15-year-olds-with-a-modicum-of-common-sense: MtGox relied on a "transaction id" that could be changed after the fact by a user. The transaction id isn't permanent until the transaction is confirmed. Until such a time, an attack known now as "txid malleability attack" can be used to change it. Such an attack against MtGox might look like this:
1. Attacker request a payout of his bitcoins to an address for which he has the private key.
2. MtGox creates a transaction with transaction id"tx1" transferring the correct number of bitcoins to that address and submits it to a node in the bitcoin network.
3. Attacker gets that transaction from the network (very, very quickly) and issues the same transaction with a new transaction id "tx2" to a different node on the network.
4. Nodes reject whichever transaction they receive last and relay whichever they received first. The race is now on to reach the most hashing power of the network.
5. Whichever one (and only one) of the transactions winds up in the blockchain "wins". If the transaction id is "tx1", the attack failed and the Attacker starts over with step 1. If the transaction id is "tx2"...
6. The Attacker now submits a complaint to MtGox that they did not receive their funds (even though they did).
7. MtGox checks the blockchain for a transaction with id "tx1", doesn't find it and restores the bitcoins to the Attacker's MtGox account.
8. Rinse and repeat.
