The time machine stayed in Kenobi's hut, until it was found 7 years after Kenobi's death. The time machine got into the wrong hands. Rumor has it that a certain Gungan was bery bery unhappy about his life and wanted to make himself important to galactic history. He stole the time machine, went back in time and created an alternate reality. Reality for everyone except for the OT fans, cast and crew, where Jar Jar Binks is powerful, Anakin was created by midichlorians and Mrs. Skywalker dies of a broken heart.
Binks wanted to have a role in the galactic senate, so he knew he needed to get himself to Coruscant and meet some Jedi along the way.As stupid as he seems, Jar Jar concocted a brilliant plan, which included sending Qui-Gonn, a Sith Lord in disguise (and the predecessor to Darth Maul) to ruin the Jedi order. Qui-Gonn Ginn (aka Darth Tonic) used his sith powers to brainwash the Jedi. Suddenly the ficticious midichlorians were accepted as fact. Qui-Gonn's presence allowed the discovery of Anakin Skywalker to occur 10 years earlier than it would have been. He used a Sith mind trick to get Shmi to claim Ani had been immaculately conceived. In reality she had a one night stand with some space bum at Mos Eisley and couldn't remember the drunken encounter.
Jar Jar's scheme resulted in the Jedi meeting Anakin ten years earlier than was supposed to happen also changed the relationship that Obiwan and Owen were to have. Originally, Anakin was to spend many years with the Lars clan on Tatooine, growing close to Owen. Owen would eventually feel bitter towards Kenobi for taking Anakin away, but of course, the new reality was changed thanks to a certain Mr. Binks and Mr. Jinn. Also, by some chance, Anakin wound up marrying the same woman (and produce the same children) he was going to anyway, but this time, she would die much earlier than she was supposed to.
Finally, Jinn planned all a long to die in the fight with Maul and Kenobi. He wanted to die for his "cause." PLus this explains why Qui-gonn did not disappear upon his death.
So there you have it. THe new real reason for all the plot holes in the prequels.