Near the end of World War II nearly 2 million civilians evacuated East Prussia, due to the impending Soviet invasion. After the war, the Soviet Union expelled non-Russians from the region and re-settled the territory. By the time the Soviet Union fell, very few ethnic Germans, Poles, and Lithuanians remained. Today East Prussia is known as Kaliningrad Oblast and is a federated state of the Russian Federation, completely cut off from the rest of Russia. Today 86.4% of the population of Kaliningard Oblast are Russian, 3.7% are Ukrainian, 3.6% are Belarusian, 1.1% are Lithuanian, 1% are Armenian and 0.8% are German. The region is historically and culturally Prussian, Polish and Lithuanian.
When the Soviet Union and Eastern Bloc were disintegrating, there wasn't much demand from within for East Prussia to be returned to Germany or become an independent state. Though it is impossible to tell how Mikhail Gorbachev would have reacted, it would seem that he would have allowed a secession to occur. Mikhail Gorbachev had allowed Estonia, Latvia and Lithuania to secede from the Soviet Union, as well as allowing the Eastern Bloc states to initiate right-wing, democratic reforms. However, it should be noted that Kaliningrad Oblast was a federated state under the Russian Soviet Federative Socialist Republic, meaning that Boris Yeltsin could have intervened to protect Russia's interests in the Baltic, acting without Mikhail Gorbachev's permission.
Today the Russians want to keep Kaliningrad Oblast, because it is one of the most economically important states of the Russian Federation. The state is known for it's manufacturing base, low taxes and economic prosperity. The state is also one of the very few states that in which population growth is expected. The state also houses the Russian Navy's only warm-water port in the Baltic Sea, making it vital for the continued existence of the Russian Baltic Fleet. In addition to housing the Baltic Fleet, the Russians have other significant military assets in the state, making it one of the most militarized regions in Europe. They also argue that the German, Polish and Lithuanian culture no longer exist to a meaningful extent in the region, primarily due to the "Russianification" of the region.
The Germans claim that the region has deep historical and cultural ties to Germany, especially Prussia, and that the territory should be returned. They argue that the expulsion and "Russianification" of the region was morally, and possibly even legally, wrong. It should be noted that Germans are now a minority in East Prussia and that East Prussia does not connect to modern day German territory. Others have suggested that the territory be given to Poland and/or Lithuania. While still others believe the region should become an independent country. What do you believe should become of the state?
For reference, here is Kaliningard Oblast (red), along with the rest of the Russian Federation: