Initially I thought Locke was giving Hurley the old "ixNay on the abinCay!" look until I heard the Jorge Garcia interview where he talked about the eye being an unnamed actor. I now think the eye was NOT Locke, and Locke's look was genuine surprise.
A lot of things suggest that Jacob is a ghost. One, his attire in season 3 - very old fashioned, almost pirate-like (think: Black Rock).
Two, things started getting crazy on that episode when Locke shined his flashlight. I am a certified paranormal investigator, and one common belief is that spirits manifest by using available energy (like from flashlight batteries). Ben even warned Locke to not bring in any technology. Flashlight on, chaos ensued and Jacob manifested.
Third, we know Ben can see ghosts because he saw his mom. And he sees Jacob when no one else can either (until recently). In fact, some of us think that Ben rose to lead the Hostiles because he was the only one who could communicate with their true - dead - leader.
Fourth, we know Hurley can see dead people because he saw Charlie. And, he saw someone in the cabin - maybe Christian, or maybe Jacob as Christian (or maybe Jacob IS Christian). 2/3 chance here that it was Jacob and more possible indicators that he is a ghost.
One thing that was interesting when Hurley saw the cabin again after running away: it disappeared when he shut his eyes and then reopened...but he was also backing up at the same time. Remember from season 3 that there is some sort of circle around the cabin (when Locke went up with Ben, Locke bent down to investigate). Could the circle somehow "protect" the cabin by rendering it unseen? Maybe the cabin disappeared because Hurley backed up beyond the circle.