My COMPLETED Pretty Little Liars Theory
Bethany is alive. Alison is dead. They are twins.
On the night where everything went down:
Spencer hit Alison with a shovel after fighting, and Melissa found Ali's body and buried it to protect Spencer. Meanwhile, Bethany Young (Ali's twin) was hit in the back of the head with a rock, and Mrs. DiLaurentis saw this, but thought it was Alison. The police, in the pilot episode, found Alison's body, but they later identified her as Bethany. However they were correct the first time; it was Alison, dead. Bethany was pulled out my Mrs. Grunwald.
Story behind Bethany and Alison:
Mrs. D and Kenneth gave Bethany up for adoption at the time of her birth and only kept Alison, but Mrs. D visited her, including when she was in Radley (Mrs. D gave her the horse). In tonight's episode, Bethany is talking in the tapes and says her dad and Mrs. D were having an affair. She was meaning her adoptive father was seeing Mrs. DiLaurentis.
As for Bethany pretending to be Alison, Mona described "Ali" as becoming a sociopath. Which makes sense, since Bethany was in Radley, implying that she is mentally insane.