You guys basically got it. Schilling threw the pitch, which was lined to Morandini. He tagged the runner going to 2nd, then touched on the 2nd base bag for the 3rd out. He flipped the ball on the mound and ran to the dugout. The Pirates pitcher came out and proceeded to pitch to the next batter, who fouled the pitch off.
Schilling contested that after the play, he began to walk to the dugout. He then realized what happened, turned around, and took the ball off the mound. He gave the ball to Morandini later. Replays show, though, that it would've been impossible for Schilling to be able to turn around and get the ball, considering the pitcher would've already been warming up.