@Neomega: I am not sure what you are getting at.
On the one hand it seems you are saying that we are nothing more than a soft machine, which in many peoples view negates the possibility of free will. That is because software by its nature will respond to identical initial conditions and identical stimuli in an identical fashion. Thus there is no chance for it to do anything other than what it does, thus no free will. No choices, only responding to stimuli in the only way you possibly could.
Indeed the ghost in the machine metaphor speaks to how we could believe we have free will even if we don't. Self awareness by its self does not imply free will, nor the ability to influence the future. The question is if you have a true choice about how you influence the future.
And no, chaos theory doesn't give you an out here because it only implies an extreme sensitivity to initial conditions and stimuli, not unpredictability. Only the uncertainty principle breeds true unpredictability AFAIK, but that is random uncertainty - the 'God plays at dice' type - not the driven type implied by possessing free will.
On the other hand you seem to be saying that you believe in free will. I am not sure how to reconcile these positions.
I would also mention that any system with nonrepeating states can be interpreted as a computer running any program you please. A waterfall for example can be interpreted as a string of random numbers and in turn the collected works of Shakespeare, from the correct perspective. Just like the 'bible code'. So it may be that there is more to consciousness than computation (and as I mentioned consciousness doesn't imply free will).
What I was trying to say with 'to even attempt an answer we must first understand the present nature of reality' was that to know why things are as they are one must first know what things are. For example, did God create reality? So I am not sure what you are disagreeing with there.
I do not think our perceptions have been studied enough to truly understand the nature of the universe. In fact, I think the issue has largely been ignored
Again you are quite vague in what you mean here, but the issue certainly has not been ignored rather it is central. Who would have thought that all mass accelerates at the same rate in the earth's gravitational field before Galileo? The uncertainty principle was a direct result of such an inquiry, in some sense relativity was too. Even the spectrograph addresses this point. The very scientific method is a way of trying (not necessarily achieving) to deal with our problematic, subjective, perspective.