It's come to my mind that the true reason Urahara was banished is possibly far from what we have been told so far in the manga or anime. Doesn't it seem a bit of an over kill to ***** a Captain of Urahara's stature for making an untraceable Gigai? He was head of the technology department, so wouldn't that technically be his job to make something like that?
Since Urahara was in research, chances are the making of the Hogyuku was originally funded by Soul Society, and meant to be kept for TOP SECRET eyes only. What reasons they would want the Hogyuku is beyond me, it's possible that Soul Society needed a Kings Key because maybe the last one had been destroyed (This is variable). So if this was a project, chances are there was a prototype, or two Hogyukus made at the same time. It's possible that when they were experimenting with the prototype, they found out it breaks down the barrier between Shinigami and Hollow abilities(possibly far from it's intended purpose). They used it on lower class Shinigami, so they could control them if they got out of hand. This would explain where the Vizards of Karukura Town came from. Making them Urahara's Guinea Pigs. When Urahara discovered that this device could break down the barrier, he realized he could expand his own power, and peek beyond the plateau that he had been stuck on. Much like Aizen. Accept with no malicious intent of grandeur.
I beleive the true reason that Urahara was exiled was the very fact that he used the first Hogyuku on himself when it had reached 100%. Allowing him to use Hollow abilities and Shinigami abilities at the same time with no limitations. In Soul Society that would be considered absolute blasphomy, and a Solid reason why they would ***** him instead of executing him. They realized no one in Soul Society had the power to restrain him, including the Captain Commander. So instead, they exiled him and never allowed him to return to Soul Society (Hence the gate to SS rejects him). When he was exiled, he took the second Hogyuku with him (This may be where Yoruichi assisted him, she may have stolen the second Hogyuku to take to Urahara in the living Realm), to hide for safe keeping, and hid it in one of the untraceable Gigais he had created. Then, the story line of Bleach started. This explains many things. Why he was really exiled, why he is so powerful, how Yoruichi assisted him, and where the Vizards came from, and why there hang out looks just like Uraharas basement.
Your thoughts?
Edit: where ***** appears, it's because E X I L E is a banned word here. So the ***** means E X I L E
New Ammendment for Discussion added 2-28-08
I have new reason to beleive that since Urahara was asked to open a Garganta to Hueco Mundo, that Urahara may not have necessarily been banished from Soul Society.
I still stick solid with my earlier theory, but I've flexed the theory a bit to tie it in with new theories. I have reason to beleive that Urahara wasn't banished, but unofficially asked to leave, and that there were more players involved. It's possible that Yamamoto in coordination with Central asked Urahara, Yoruichi, and Isshin to hide the Hogyuku since it could not be destroyed.
This new ammendment also includes Isshin. Since there was such a great time gap between Urahara leaving Soul Society and the beggining of the Bleach story, there's a huge gap where the Hogyuku had to be hidden. I have reason to beleive that Urahara asked Isshin to hide the Hogyuku within him, inside one of Urahara's untraceable Gigai's. This Gigai had the Hogyuku within it. This may possibly be why Isshin lost his Shinigami powers. Just like Rukia, his powers eventually came back, but Isshins took a much longer time to restore because he had been inside the Gigai with the Hogyuku longer than Rukia had been. It also explains why Urahara knew Isshin, and why he also said that it took less time than he had thought for Isshins abilities to return. When Isshin lost his powers, he most likely settled down, accepting the fact that he had to live his life as a normal human. Many beleive Isshin left at a different time than Urahara, however I beleive that their departure from SS was a full planned out event coordinated by Yamamoto, Central, Urahara, Yoruichi, and one of the noble families of Soul Society:
Isshin Shiba.
More ammendments to come.