Hello,
I decided to make a better guide to breaking down a Miracle lock. I also made videos of the cylinder using a correct key and a wrong key ( I put it in backwards to demonstrate), to give everybody a better idea of how the lock actually works. This is the Miracle lock cylinder, not the Ingersoll version.
NOTE: The videos are at the bottom of the page.
Here it is.

Start by unlocking the lock and remove the shackle.

In each shackle hole is a Philips head (star shaped) screw. you will need a fairly large headed screwdriver to remove them.

When you get them out, carefully hold the lock upright and the bottom portion should just fall out. If not, you may need to pull gently on the key. Be careful if you do this as it may suddenly come apart and the discs may get lost/mixed up. This is what you should get.

This is what it it should look like. (minus the discs on the key) Note the position of the black spring.

Here are all the internal parts.

The discs and inner core:

Inner core, outer core, black spring and a silver washer/spring combo.

The ball detainer/locking bar. You can see where the silver spring/washer goes around the edge of this.


Notice the hole in the middle of the slot? Thats where this thing pokes through both core parts and into the ball detainer. Im not sure of its exact function, but it would appear that it acts as a kind of bearing for the key to turn. Please feel free to correct me on this.
It fits into the bottom of the inner core:

and extends through:

How it looks when assembled:

See that slot on the inner core? A serrated bar fits into there. It meshes with teeth on the discs if to much tension is applied, stopping them from moving.

Serration is toward my thumb:

Teeth on the discs:

And how they are in the inner core:

With everything back to where it should be:

Reassembly:
Before completely reassembling the lock, make sure that your core is correctly assembled and you have all the discs positioned correctly.
Start with putting the ball bearings back in:

Then the ball detainer.

Then the silver spring/washer (yes, it is supposed to be bent like that):

How it should look at this point. Note the detainer is in the unlocked position:

The core re assembled. This is why you took note of how the spring was inserted.




Notice this notch?

Its is where this bump on the core goes.

Everything back in place.

Put the keyway back on:

At this point you may have to put the key into the lock and rotate it to get the inner core and the ball detainer to match up. If you do, simply put the shackle back in and lock it back up, put the bottom cover back into place, unlock the lock and put the screws in.
Since I cant seem to embed the videos, please click the links.
http://www.youtube.com/watch?v=MCX62W4dgl0
A demonstration of a Miracle Lock cylinder and discs with the correct key.
Notice that as the key turns, the discs stop against the inner cylinder and create enough tension for the key to turn the discs up and down into the correct position to allow it to continue turning.
http://www.youtube.com/watch?v=5k2-Yd_v_lU
A demonstration of a Miracle Lock cylinder and discs with the wrong key. I reversed the correct key for demonstration purposes.
Notice that as the key turns, the discs move in and out preventing the inner cylinder from turning.