So let's summarize this to get past the legal bullshit.
Obama imposes sanctions on Russia because they are, in effect, ******* with our elections.
Flynn is the designated National Security Advisor, but of course, still not in office as Trump has not been inaugurated yet.
Flynn calls his Russian counterpart and talks about the Obama-sanctions. (Which is LEGAL and arguably appropriate).
The FBI questions Flynn about his communications with his Russian counterpart, leading him to believe that the conversation was illegal and could subject him to prison time. In short, they lied to him.
He falsely denied talking to the Russian about the Obama sanctions. This lying WAS a crime, but it was clearly a matter of entrapment.
Then Flynn told Mike Pence that he hadn't discussed the sanctions with the Russian (to be consistent with what he told the FBI), and Pence relayed that to Trump.
Mike Pence went public with the absolute denial that Flynn hadn't discussed the sanctions with his Russian counterpart.
It comes out that Flynn did talk to his counterpart about the sanctions, and lied to the FBI and to Pence.
And that's about it.
SO AT THE ROOT OF ALL THIS is a conversation that was entirely legal and appropriate, but Flynn was led to believe was a FELONY.
The ONLY REASON why Trump hasn't pardoned Flynn is because Flynn lied to Mike Pence, and thus to Trump. And Trump won't forgive that breach of loyalty.
And his career, reputation, and finances are in tatters, and he could go to jail (where he will be welcomed as a hero). As the late Dick Nixon would have cautioned him, "It's the cover-up that will bite you in the ass."