He was never free to go; that's a myth spread by his attorney, who received an official condemnation by the Swedish Bar Association for lying about that in court as well as a major dressing down from the judge (he's lucky he didn't get hit with legal sanctions). There was never a time period where he was not under investigation, and when he fled the country, his attorney was actively pretending that Assange was getting ready to come in willingly (and then after he got to the UK, Hurtg continued stalling, pretending Assange was going to be coming immediately back). If you want to see all the nitty-gritty, you can read the Ny SMS logs, they've been released.
To go into more details about the early stages: AA and SW walked into a Stockholm police station and made the report, and were interviewed by two separate officers. As it was a weekend, the only available prosecutor, Eva Finne, took the case. There were a total of three initial investigating officers - Wassgren, Krans, and Gehlen. Wassgren and Gehlen felt, from the interviews, that Assange should be charged with five counts (2x molestatation, 1x unlawful sexual coersion, 2x rape); Krans felt it should be 2x, 1x, 2x. News quickly broke that Assange was being investigated. This is supposed to be illegal, the name isn't supposed to be disclosed at this stage but Sweden has some crazy-strong whistleblower protection laws (part of the reason Assange was moving there in the first place), you can't even investigate to find out who made a leak, so it always happens when cases involve famous people. Finne quickly had a warrant issued for Assange's arrest for the two rapes - even though he had not at that point refused to cooperate. There was naturally a huge backlash, and Finne withdrew the warrant (thus dropping the rape charges), but kept the investigation open for the molestation and unlawful sexual coersion charges. It was during this time that Assange was interviewed; since the only investigations open referred to the lesser charges, that's all he was interviewed about. Meanwhile, the legal representative of the women, Claes Borgström, appealed the decision (Sweden has a police appeal board, which is frequently used for cases like this and isn't particularly unusual); the fact that Finne had dropped the rape charge concerning SW before SW's statement had even gotten into the computer system made it pretty obvious that the case hadn't gotten a fair hearing, and the board ruled in favor of the women. The case was thus transferred to the next prosecutor up, Marianne Ny. Ny reopened the investigation for all five counts, and tried to get Assange back in to interview him for the dropped charges. The team meanwhile did lots of followup interviews and forensics collection and testing. It was during this time that Assange fled to the UK. Ny spent over a month trying to get Assange to come back, continually reaching out to his attorney, even the day before she went into court to get a warrant for him. A judge approved the Swedish warrant (thus he was formally anklagad, the Swedish stage for trying to get a person into custody so that they can then be åtalad, which is the stage that leads to trial) and subsequently the EAW was issued. The original warrant was open for the full five counts. Assange appealed to the Svea Board of Appeals (Sweden has a strong defendents rights process, even though he was hiding from the law he was still able in absentia to appeal the investigation), and a full court hearing was held involving a full review of the evidence and testimony from Assange's attorneys. For the most part, he lost - one of the rape charges was dropped, but the other and all of the others were upheld, leaving a formal finding of probable cause of rape, molestation, and unlawful sexual coersion. Assange appealed to the Swedish Supreme Court. His appeal was rejected. He then moved through the appeals process in the British system, first the lower court, the high court, and the Supreme Court, alleging malicious prosecution, an unlawfully issued warrant, and a number of other things. He lost at each stage on every count he argued. He claimed to be preparing a last-minute appeal to the Supreme Court on different grounds - instead, he fled to the embassy.
The current status is that he has an EAW out for him, four charges, checkbox on #4 ticked for rape, all charges upheld as being applicable and equivalent to their equivalent crimes in the UK, with the warrant issued legally and properly. He has been found in violation of his bail terms as well.