I've commented on this scripture several times.
I obviously take interpretation #2. I disagree that it is awkward or strained or a clever manipulation. It seems a very natural interpretation, and I think it fits just fine with the rest of Nephi's sermon, rest of BoM, and Mormon doctrine.
Comment #7 represents how I see it.
Quote:
There is a common linguistic technique that can clarify lots of statements that use parenthetical comments (including those that are written with commas) - simply switching the phrases and adding the appropriate qualifiers. Often the shorter version is used when the author wants to say it as concisely as possible - which fits Nephi’s oft-stated space constraints.
Switching the phrases in 2 Nehpi 25:23 gives us:
“After all we can do, we know that it is by grace that we are saved.” Adding appropriate qualifiers makes it, “(Even) after all we can do, we know that it (still) is by grace that we are saved.” This final construct is a perfectly reasonable reading of the original - not the only possibility, but certainly a reasonable one.
That fits Mormon theology perfectly, since it says that even though we are required to exert our all, that effort doesn’t save us without God’s grace. That message is repeated over and over and over again in the rest of the Book of Mormon, including Nephi’s other words.
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