If you haven't already, you should start by reading Wired's article on this.
I am not a lawyer. That said, I want to walk through my take on each stage of this.
The government served Lavabit with an order requiring them to supply metadata about every email, as well as mailbox accesses, for a specific user. Because this was "metadata" only the government was not required to supply probable cause.
First, it should be noted that metadata isn't a thing. There's not a definition, it has no meaning. There's simply data.
Lavabit refused to comply, whereupon the government filed a motion requiring them to comply, which a US magistrate so ordered.
And here's where things go wrong. The magistrate erred in ordering compliance. While an argument could be made (note: I'm not making this argument) that in general, certain metadata does not have an expectation of privacy, Lavabit operates a specialized service. Immediately upon receipt of mail, it's encrypted with a user's public key. After that it's technically impossible for the service to read the plaintext of a user's email. This relationship creates a strong expectation of privacy, and the Fourth Amendment very explicitly requires a warrant supported by probable cause at this point.
But let's ignore this first order. Lavabit has, in past, complied with lawful search warrants, and there's no reason to believe they would not have been able to comply with a lawfully constructed one here.
Following this the FBI obtained a warrant requiring that Lavabit turn over their SSL private key. The application for, and issue of, this warrant unambiguously violated Lavabit's constitutional protection. The Fourth Amendment requires that a warrant describe specifically where is to be searched, and what they're looking for.
Access to Lavabit's private key would allow someone with the raw internet traffic (which presumably the FBI, had access to) to decrypt and read any user's emails before they reached Lavabit's servers. Simply put, this was a warrant issued in flagrant violation of the United States Constitution.
The fact that Lavabit refused to cooperate with the government's original order in no way gave them the right to apply (or be granted) the follow up order. Failure to comply with a lawfully issued warrant can result in fines, or even jail time, but it does not grant the government extra-legal authority.
The entirety of this case, but particularly the government's second request, demonstrate a travesty of immense proportions. The assumptions I grew up with about my legal protections as an American are rapidly being shown to be illusory. Lavabit's founder is raising money to support his legal defense, I've donated and I hope you will too.