I've been working on this theory for a while here. Its a compliment to the thread created by SSJ4Naruto, and theory created by Yondaime.

In order to see how Naruto uses his power, its essential to understand HOW the Kyuubi was sealed into him in the first place. Each of the various Bijjus have been sealed in different manners, resulting in "side effects" on the Jinchurriki. I won't go into them here.
Sarutobi's sealing of Orochimaru's hands is the KEY to understanding Naruto's abilities.
The below images shown chronologically according to my theory.
Issues with the Shinnigami Sealing technique:
1. If the 2 Souls are sealed together into the belly of the Shinigami, destined to battle eachother for all eternity... How does Naruto use the Kyuubi's chakra? EXPLAINED BELOW.
2. How does the sealing technique avoid sealing Naruto's OWN soul into the Shinigami's belly? EXPLAINED Below & in Yodaime's post.
Lets Begin...
Notice in this Image: Sarutobi's SOUL REFLECTION is shown floating above his head. Important to note that Sarutobi has 2 Shadow Clones PRIOR to casting the jutsu.
Notice in this Image: The Shinigami pulls the SOUL REFLECTION infront of himself. Sarutobi is now "living" on "borrowed time".
Notice in these next 2 Images: Once prepared, the Shinigami reaches through the SOUL REFLECTION of Sarutobi, and out of his physical body, in order to grab the SOUL of his Opponant. Only the physical body is left behind. This shows that the Shinigami is able to recognize the difference between Physical and Spiritual forms.
Notice in this Image: The 2 summoned souls of the First and Second Hokages are now "bound" to the SOUL REFLECTION of Sarutobi. The shinigami then takes his knife and cuts the battling souls of the Hokages, with the portions of Sarutobi, and swallows them.
Notice the Contradiction now taking place... or is it: Sarutobi is shown with the "mark" of the Shinigami jutsu, ie the seal. At this point, each of the clones, and Sarutobi himself are exhausted. When the clones are dispersed... What is SUPPOSED to happen, is the Sarutobi SHOULD be left MORE tired and with LESS stamina. HOWEVER, he is not!! He gets a second wind, and is strong enough to dislodge Orochimaru's sword from his hand, and enact the final part of the technique.
SO lets Pause and reflect on this, and then move on to Naruto...
1. Sarutobi performs the Shinnigami jutsu. It is not a summoning. However, its design has been recorded in the First Hokage's giant "Sealing Scroll".
2. This sealing scroll was used in order to create the "Key" and its function is to control the ammount of Kyuubi chakra flowing through Naruto.
3. I believe Jiraiya interpreted HOW the Key Scroll works WRONG!!!
4. Minato died without explaining his intentions on HOW the Key Scroll should be used... thus explaining why Jiraiya was unprepared for the results of his experiment using the Key Scroll.
More theory and explanation after the last 2 images...
Notice in this Image: The Shinigami seal on Naruto's stomach OPENS. HOW is this possible?!?!
Notice in this Image: The liquid from INSIDE the seal flows into the water surrounding Naruto.
Theory Continued...
There are 2 seals at work here... but How is this possible??? I'll break down the mechanics and LOGICAL sequence for this based on evidence shown in Sarutobi's example...
Seal #1: This is the mark of the Shinigami. The Key Scroll's design was to close the hole in Naruto's stomach, when situations occur, like shown in the images I attached. Minato intended for the seal to allow the Kyuubi's chakra to be used by Naruto, without the Kyuubi taking control. The Key Scroll's purpose is to RE-LOCK the seal FORMED as a RESULT of the Shinigami Jutsu. Jiraiya (as well as every Naruto fan) thought the function of the Key Scroll was to allow more Kyuubi chakra to flow into Naruto. HOWEVER, the unknown and unintended consequences of this actually BREAKS OPEN the Shinigami seal itself!!!! The Key Scroll is meant to enable the seal to reform, without require the life of another person.
This is how the Kyuubi sealing took place... based on Sarutobi's usage...
1. Minato held Naruto in his arms, and created a Shadow clone of himself, and Naruto.
2. Minato performed the jutsu, only using his soul.
3. The Ying and Yang are pulled apart from the Kyuubi, each passing through Naruto, and into the Shinigami's stomach.
4. Both Naruto's have seals on their stomachs.
5. Shadow clones are dispelled, Minato "dies", and poof... Naruto has 2 seals now inside him...
Seems simple... but it is NOT...
Of the 2 chakras, only the Ying Chakra (the chakra having the ability to "Reason/Think") was intended to be used by Naruto. This chakra is seen passing through the giant gate. REMEMBER HOWEVER, that these are both inside the Shinigami's stomach, that means that the seal on Naruto's stomach is in fact a "gateway" to the shinigami's stomach... Can you see where I am leading this...?!?!
1. It is said that Minato is "LOCKED" in a perpetual battling fighting BOTH the Ying and Yang chakra inside of the Shinigami's stomach.
2. The battle could be SYMBOLIC!!!! Isn't the the Seal on the GIANT CAGE symbolically BATTLING the Yang Chakra for all Eternity?!?!.
3. A seal is in fact a large amount of chakra, which could be infact the chakra/soul of MINATO HIMSELF!!!
4. It has been shown and proven that the Shinigami seal acts like a gateway, allowing the sealed chakra to escape and to be used...
5. The shadow clone of Minato, was the image that appeared to Naruto when the 8 Tails was released. The Shinigami is able to distinguish the SOUL REFLECTION and a shadow replication. However, that shadow replication did have some chakra, not the soul, so that portion of chakra was SET TO RELEASE and come forth ONLY when the 8 Tails appeared. AND Why is was a 1-time only occurrence....
Just like with Sarutobi, the seal on his stomach is a gateway to the Shinigami's stomach, and literally is 2 seals to hold back the 2 battling souls... It is said to be an eternal battle in the stomach of the Shinigami, because the user is DEAD. However, Naruto is very much alive. Thus there is the possibility for the seal to break.
The Soul's Spiritual battle, is taking place, sealed inside Naruto's physical body...
1. The shadow clones (chakra) of Minato and the Kyuubi are 1 seal, and meant to be used by Naruto.
2. The souls of Minato and the Kyuubi (ie the Seal and Gate vs the Overwhelmingly influential voice of the giant fox) make up the second seal.
3. The Shinigami mark on Naruto's stomach is the gateway.
4. The Key scroll is meant to relock BOTH seals when needed. Unlocking is BAD. lol
I know this is alot to digest ( pun intended haha) ... and Any question posed I will answer. My answers aren't to criticize or defend my theory blindly, but to further the discussion and explanation of my train of thought... and what I may have not spelled out enough...
THANKS FOR READING!!!
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Reading that theory isn't required to follow mine, but it helps expand on mine, and saves me time to repeat his... In order to see how Naruto uses his power, its essential to understand HOW the Kyuubi was sealed into him in the first place. Each of the various Bijjus have been sealed in different manners, resulting in "side effects" on the Jinchurriki. I won't go into them here.
Sarutobi's sealing of Orochimaru's hands is the KEY to understanding Naruto's abilities.
The below images shown chronologically according to my theory.
Issues with the Shinnigami Sealing technique:
1. If the 2 Souls are sealed together into the belly of the Shinigami, destined to battle eachother for all eternity... How does Naruto use the Kyuubi's chakra? EXPLAINED BELOW.
2. How does the sealing technique avoid sealing Naruto's OWN soul into the Shinigami's belly? EXPLAINED Below & in Yodaime's post.
Lets Begin...
Notice in this Image: Sarutobi's SOUL REFLECTION is shown floating above his head. Important to note that Sarutobi has 2 Shadow Clones PRIOR to casting the jutsu.
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Notice in this Image: The Shinigami pulls the SOUL REFLECTION infront of himself. Sarutobi is now "living" on "borrowed time".
You must be registered for see images
Notice in these next 2 Images: Once prepared, the Shinigami reaches through the SOUL REFLECTION of Sarutobi, and out of his physical body, in order to grab the SOUL of his Opponant. Only the physical body is left behind. This shows that the Shinigami is able to recognize the difference between Physical and Spiritual forms.
You must be registered for see images
You must be registered for see images
Notice in this Image: The 2 summoned souls of the First and Second Hokages are now "bound" to the SOUL REFLECTION of Sarutobi. The shinigami then takes his knife and cuts the battling souls of the Hokages, with the portions of Sarutobi, and swallows them.
You must be registered for see images
Notice the Contradiction now taking place... or is it: Sarutobi is shown with the "mark" of the Shinigami jutsu, ie the seal. At this point, each of the clones, and Sarutobi himself are exhausted. When the clones are dispersed... What is SUPPOSED to happen, is the Sarutobi SHOULD be left MORE tired and with LESS stamina. HOWEVER, he is not!! He gets a second wind, and is strong enough to dislodge Orochimaru's sword from his hand, and enact the final part of the technique.
You must be registered for see images
SO lets Pause and reflect on this, and then move on to Naruto...
1. Sarutobi performs the Shinnigami jutsu. It is not a summoning. However, its design has been recorded in the First Hokage's giant "Sealing Scroll".
2. This sealing scroll was used in order to create the "Key" and its function is to control the ammount of Kyuubi chakra flowing through Naruto.
3. I believe Jiraiya interpreted HOW the Key Scroll works WRONG!!!
4. Minato died without explaining his intentions on HOW the Key Scroll should be used... thus explaining why Jiraiya was unprepared for the results of his experiment using the Key Scroll.
More theory and explanation after the last 2 images...
Notice in this Image: The Shinigami seal on Naruto's stomach OPENS. HOW is this possible?!?!
You must be registered for see images
Notice in this Image: The liquid from INSIDE the seal flows into the water surrounding Naruto.
You must be registered for see images
Theory Continued...
There are 2 seals at work here... but How is this possible??? I'll break down the mechanics and LOGICAL sequence for this based on evidence shown in Sarutobi's example...
Seal #1: This is the mark of the Shinigami. The Key Scroll's design was to close the hole in Naruto's stomach, when situations occur, like shown in the images I attached. Minato intended for the seal to allow the Kyuubi's chakra to be used by Naruto, without the Kyuubi taking control. The Key Scroll's purpose is to RE-LOCK the seal FORMED as a RESULT of the Shinigami Jutsu. Jiraiya (as well as every Naruto fan) thought the function of the Key Scroll was to allow more Kyuubi chakra to flow into Naruto. HOWEVER, the unknown and unintended consequences of this actually BREAKS OPEN the Shinigami seal itself!!!! The Key Scroll is meant to enable the seal to reform, without require the life of another person.
This is how the Kyuubi sealing took place... based on Sarutobi's usage...
1. Minato held Naruto in his arms, and created a Shadow clone of himself, and Naruto.
2. Minato performed the jutsu, only using his soul.
3. The Ying and Yang are pulled apart from the Kyuubi, each passing through Naruto, and into the Shinigami's stomach.
4. Both Naruto's have seals on their stomachs.
5. Shadow clones are dispelled, Minato "dies", and poof... Naruto has 2 seals now inside him...
Seems simple... but it is NOT...
Of the 2 chakras, only the Ying Chakra (the chakra having the ability to "Reason/Think") was intended to be used by Naruto. This chakra is seen passing through the giant gate. REMEMBER HOWEVER, that these are both inside the Shinigami's stomach, that means that the seal on Naruto's stomach is in fact a "gateway" to the shinigami's stomach... Can you see where I am leading this...?!?!
1. It is said that Minato is "LOCKED" in a perpetual battling fighting BOTH the Ying and Yang chakra inside of the Shinigami's stomach.
2. The battle could be SYMBOLIC!!!! Isn't the the Seal on the GIANT CAGE symbolically BATTLING the Yang Chakra for all Eternity?!?!.
3. A seal is in fact a large amount of chakra, which could be infact the chakra/soul of MINATO HIMSELF!!!
4. It has been shown and proven that the Shinigami seal acts like a gateway, allowing the sealed chakra to escape and to be used...
5. The shadow clone of Minato, was the image that appeared to Naruto when the 8 Tails was released. The Shinigami is able to distinguish the SOUL REFLECTION and a shadow replication. However, that shadow replication did have some chakra, not the soul, so that portion of chakra was SET TO RELEASE and come forth ONLY when the 8 Tails appeared. AND Why is was a 1-time only occurrence....
Just like with Sarutobi, the seal on his stomach is a gateway to the Shinigami's stomach, and literally is 2 seals to hold back the 2 battling souls... It is said to be an eternal battle in the stomach of the Shinigami, because the user is DEAD. However, Naruto is very much alive. Thus there is the possibility for the seal to break.
The Soul's Spiritual battle, is taking place, sealed inside Naruto's physical body...
1. The shadow clones (chakra) of Minato and the Kyuubi are 1 seal, and meant to be used by Naruto.
2. The souls of Minato and the Kyuubi (ie the Seal and Gate vs the Overwhelmingly influential voice of the giant fox) make up the second seal.
3. The Shinigami mark on Naruto's stomach is the gateway.
4. The Key scroll is meant to relock BOTH seals when needed. Unlocking is BAD. lol
I know this is alot to digest ( pun intended haha) ... and Any question posed I will answer. My answers aren't to criticize or defend my theory blindly, but to further the discussion and explanation of my train of thought... and what I may have not spelled out enough...
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