Lisa,
The definition depends a little bit on the FEFLOW version, which is why you might have found different definitions. In later versions, the storage capture/release has been added to the budget calculation, leaving the imbalance to only reflect a remaining imbalance of all terms above, representing, for example, numerical errors. In your case, the release from storage (POSITIVE value) represents the amount that the storage in the system changes, i. e., the overpumping. The reason that the value is positive is due to the fact that water coming from storage in the model can be seen as a source of water for the model that can leave the model through any of the boundary conditions. Water that is additionally stored in the aquifer, vice versa, can be seen as moving into a 'sink', and consequently is shown as NEGATIVE.
Good luck!
Peter