Benjamin and I are in accord as regards this Parable, it is Kafka's most perfect.
(See the Full Fragment for more)
Benjamin's comment about the pacing is especially pertinent, to me, because of its relation to Gestus. There seems to be "movement," yet there is always a halting, a return to the origin or center of the parable - a clever inversion of Don Quixote and Sancho Panza. It emphasizes the "singularity" of the parable that seems to make easier a comparison to the scission between signifier and signified (or, in Benjamin's terms, Truth and Transmissibility). The "singularity" of the parable is something like the "singularity" of a signifier.
The parable also displays a relation to literature, or perhaps language, that is interesting. It calls into question even the referential ability of fiction to the narrative of its author. The "preordained object, which Sancho Panza himself was supposed to have been" does not exist.
But how to take this reading of the parable and compare it to the "typical reading"? More is to be done.[Picasso's "Don Quixote"]