On the one hand, stolen passports and one way tickets seems like a bad sign, and if you wanted to get an explosive device onto an aircraft, thats the one you would pick. On the other hand, there is alot of triad activity in that particular area (drug smuggling, currency smuggling, etc.) so while almost certanly illegal it isn't necessarily terrorism related.
They're thinking catestrophic failure of the airframe at 35000 feet or higher though. Thats not generally a good sign, and there are very few things that could do that to a newer boeing 777 short of an internal cargo bay explosion, a missile, or a fuel tank fire. A missile would likely have shown up on radar traces, but there are that crapload of missing surface to air missiles from Lybia we never recovered floating around, so thats a possibility. Internal device big enough to bring down an aircraft onboard? maybe. It would still take a pretty sizable device placed near a major structural aerodynamic component to do enough damage to a 777 to the point where the pilots couldn't get a call off. Even an airframe breech that caused a massive pressure loss wouldn't affect the sealed cockpit immidiatly. Realistically though, even a "holy ****, one of the wings just fell off" scenario should have resulted in some panicked radio calls. The weather was relitivly clear, there was no lightning in the area at the time, and no terror group seems to have claimed an attack right away that we are being told about, so i'm inclined to think fuel tank explosion at this point