A long elastic cylinder, with radius a and shear-modulus μ, becomes unstable given sufficient surface tension γ. We show this instability can be simply understood by considering the energy, E(λ), of such a cylinder subject to a homogenous longitudinal stretch λ. Although E(λ) has a unique minimum, if surface tension is sufficient [Γ≡γ/(aμ)>sqrt[32]] it loses convexity in a finite region. We use a Maxwell construction to show that, if stretched into this region, the cylinder will phase-separate into two segments with different stretches λ_{1} and λ_{2}. Our model thus explains why the instability has infinite wavelength and allows us to calculate the instability's subcritical hysteresis loop (as a function of imposed stretch), showing that instability proceeds with constant amplitude and at constant (positive) tension as the cylinder is stretched between λ_{1} and λ_{2}. We use full nonlinear finite-element calculations to verify these predictions and to characterize the interface between the two phases. Near Γ=sqrt[32] the length of such an interface diverges, introducing a new length scale and allowing us to construct a one-dimensional effective theory. This treatment yields an analytic expression for the interface itself, revealing that its characteristic length grows as l_{wall}∼a/sqrt[Γ-sqrt[32]].