i ll try to make it easy for you
Iodine is stored in our thyroid gland and then after some chemical reactions gets connected with a protein called tyrosin.Then we have a molecule of MIT.
2 iodineS with tyrosin gives us a molecule of DIT.
2 DIT together give us a molecule of T4 or thyroxine
1MIT + 1 DIT give us a molecule of T3 or triiodothyronine.
T3 AND T4 are stored in the thyroid gland too by a protein called TG (thyroglobulin)
Now..what about T4 T3 and the blood...
After chemical reactions T3 and T4 are set loose in bloood serum BUT these form of hormones are connected with proteins of the blood.
FREE T3 and T4 is the biologicaly active forme of the hormones.Free T4 AND T3 are not connected with blood proteins and so they are the safest way to see how your thyroid works.
I ll give you a simple example.
Before going for blood tests you take an aspirin for a headache.
Aspirin is acetylsalicilic acid which lowers the level of T4 in blood.
When you get the tests you see a low T4 and you or the doc can assume that you re maybe hypo...so he gives you by mistake levoxyl...and after a while on medication you produce hyperthyroidism.
That is why FREE forms of T4 AND T3(along with TSH) is the safest way to diagnose a thyroid prob.
Another example is pregnancy.
In that case T4 is usually high though there is no sign of hyperthyroidism.
i hope i made it a little easier for you
------------------
That which does not kill us makes us stronger.
still confused 
