I have a feeling you aren't going to get an official answer from the developers here.

I think the story is that the cultists were practicing some form of magic in not-so-secret (giant green crystal in the mall). Then when the zombie virus started spreading into town. They tested permanent floating magic on/in a cultist house and that is why that house is floating. The cultists then proceeded to find some landmass somewhere to make float in the sky above the town they lived in to avoid the zombies.

Spoilers for final quest:
The final quest giving green floating dude is probably the guy on the wanted posters for traveling through time and space. After you take down all his wanted posters, he "rewards" you buy bringing up some 'source-of-magic' type of device that was underground. Thus allowing you to travel to Seattle in the Washington map. I have no idea how Big J fits into the story but he seems to want to stop Nelson from making maps. Big J might also know who the floating green guy is by his lack of surprise at the teleportation pad, and his magical disappearance.

is there a space bandit poster location guide?

Originally posted by Mr. LandFish:

is there a space bandit poster location guide?

There is a guide for all the quests in the steam guides page that has locations and screenshots for each poster.
There is one on the hospital entrance, one in the park, one on the side of the demolition walls closest to the mall, and one on the back of the police station near the prison where the parking lot is.

k thx

There is also a semi truck on the highway with a few cameras watching a chair. It looks like the rear doors for the trailer of the truck were blown up. So either something escaped from inside or was busted out by external help. The friendly mega zombie comes to mind.

hmm... why woud they transport a mega or whatever was inside of it?

It isn't a police or military transport. I can't think of any normal civilian transport that does humans. So it must be some organization like the cultists or maybe an 'anti-cultist' group. They could have been transporting a key factor in making the flying magic.

The deadzone is where I get really confused. The military clearly sealed off those tunnels with the green keycard doors. However, once you go down into what is supposed to just be a metro tunnel, you find a military shooting range and other military things. These must have been set up before the place became a deadzone. They had enough time to seal off the entrances but not to get any of the stuff out?

yea that's kinda werd

Then there's the helicopter crash in the north and the crater around the portable toilet in the south. It would be funny if that toilet was launched by a mega at the helicopter, but the crater trails don't make sense for that.

lol, didn't know about that toilet

I'm just now starting to think about why the player is there. I think you play as a member of the cult that lives on the island. You spawn with a map that has markings for teleporters and airdrops. That means your character has a knowledge of where those are before going to any of those places. The npcs also say nothing special to you, as if they expect you to just walk onto their floating island and start trading stuff. There is (as of yet) no dialogue that indicates you are new there. I think the floating island only just recently got up to where it is and they sent you down to enable the teleporters and continue to gather supplies. You know they aren't making a whole lot up there by themselves. The DJ booth has no npc in it. I think the player character was the DJ and the villagers all wanted you out of the way because you made so much noise. This also helps reinforce why you can't leave the map. Your character wants to stay here and help the npcs on the island.