Lori got eaten by the zombie. That's why he was so bloated. If you look carefully (so gross) he actually had some of her hair in his mouth. They discussed it on talking dead.
The item Rick picked up (before seeing the bloated zombie) was the bullet Carl used on Lori.
Saw a preview for next week and it looks like Andrea still likes her bad-boys... tsk tsk......
The three graves were for T-dog, Lori, and Carol. Since they haven't found Carol yet, they assume she is dead (I hope she isn't!)
Daryl holding the baby....someone on twitter said exactly what I was thinking. Something to the effect of "Daryl holding a baby? My ovaries are exploding!"

I have had a crush on him for most of this show.