I'm a bit late - life got in the way.
is Coppelius Coppola? or not? Are they Dopplegangers, or the same? Are both real, or is one illusory? Hoffmann wisely refuses to answer these questions, and leaves the reader ever more disturbed by these unresolved issues.
A brilliant piece, I think; well deserving its high reputation... but a very troubling one, the more one thinks about it.
I'm not sure it's so wise - or perhaps it is, but then I'm not really his target audience. Ambiguity is all well and good to me but it should produce a multiplicity of meanings. I'm having a hard time extracting a first meaning from this.
The main elements seem to revolve around eyes, automata, and a bit of fire and whirling and circles. The eye-man, Coppelius, almost seems like the orchestrator of a conspiracy against Nathanael. He disrupts N's home life. He threatens N when the boy was discovered spying on them. This has C producing the "eye" comments that make it almost unavoidable that N would equate him with the Sandman. (And does anyone have any opinions on what the heck is going on when C seems to detach and rearrange N's hands and feet? Almost like N is an automaton of some kind himself, but just as easily some weird hallucination.) And Spalanzani and C are obviously working together on the automaton and S is lying to N about C's identity. It just so happens that N's lodgings burn down, resulting in his being put next to S's house and able to observe Olympia. Granted, the actual move is put on N's friends, but it certainly has the results C and S would want. But even then, N doesn't think much of her until C freaks out N with the "eyes" (glasses) and then sells the spyglass. This seems to be magical, as N is then immediately dumbstruck and infatuated when observing O through it. As he sees the automaton as a real woman via the spyglass, he seems to see the real woman, Klara, as an automaton before his last insane fit. And C is there to witness that. I believe he was the "strange little gray bush" approaching that made N pull out the spyglass again. So, basically, C does seem to be a malevolent external force bent on N's destruction, despite what Klara said in her letter and repeated as the story went on.
That said, N is definitely a kind of Narcissus before the pool of Olympia. Her pneumatic aspirations and rapt stare are all N needs to feel like he's a great guy, as he bounces his reflection back to himself from her. And he is disposed to flights of fancy and negative thoughts, feelings, behaviors. While K has some automaton-qualities herself, she may be right to the extent that C had no effect on her and she even survives N's madness to live happily ever after. I gather that Hoffman was a sort of anti-bourgeois complacency sort of guy, yet a complacent bourgeois element is the nearest thing to a clear (but overly obvious) theme: that the sensitive romantic artist is sort of damned to an unpleasant existence and can never have the nice life the properly adjusted rational sort can have.
Kind of sliding into the technical/structural from the thematic, the story was almost ruined for me when the switch from the epistolary style to the authorial intrusion occurred. I don't like the epistolary style that was so in vogue in early fiction but I can deal with it. But breaking from that to the overwrought author's voice really took me out of the story. (I also don't like being addressed as a "gentle reader".) That said, some of the authorial excuses for telling the story the way it was rang true and I find it interesting that "the author" describes his urge to tell Nathanael’s story in almost possession-like terms, much as N describes C's effect on N. For a time I wondered if the author was C sometimes coyly referring to himself in third-person, or if he was the "pleasant-looking man" K ended up with, but neither of those rings true, as the author (not necessarily Hoffman) seems more akin to N.
I also found myself nitpicking, which doesn't always happen when a story's really blowing me away. N says he hasn't written for awhile because he's been distraught... while writing while obviously still distraught. And K refers to Lothar as both her brother and N's which makes no sense until K & L's backstory is given. And, hazard of the epistolary style, N writes "if only I -- if only I could solve the mystery". Emotional stuttering in a letter rings false. (Along with the epistolary style, the "G___" convention bugs me.) And N describes himself as being upset with K because of her letter, yet says he can't wait to see her because he won't be upset with her by the time he does. Erm, so if you can say that, you're not really upset with her even now, right? And, at one point, N is described as having "all his depression vanish" on seeing K yet, in the next paragraph, is described as being in the grip of a deterministic pessimistic funk. This is all trivial, but bothers me. It could be purposeful to draw N as a bundle of contradictions but doesn't seem so. Oh, and Hoffman never explained how N got from the looney bin to his family home. One can assume his family came to get him or his friend Siegmund decided he'd be better off there, but one also has to wonder if Hoffman dropped the ball or if the whole thing is a mad delusion at that point.
Perhaps the most important problem for me is that I gather that K is supposed to be seen as a sympathetic character with flaws but I couldn't stand her. Her letter (and some later aspects) made her come off as presumptuous, arrogant, priggish. "It's your beloved father's fault he died and you shouldn't be traumatized." I'm not sure if she's supposed to be a contrast to O because she's got a lot in common with an automaton. She may be functionally correct, but seems selfish and self-involved in her own way. She delivers any correct advice with spectacularly bad form.
It's interesting that you see so much humor in the story, Extollager. The story opens with N expecting K & L to laugh at him and encourages them to do so. Without consciously seeming to echo this, K says she could almost laugh about it in her reply and, when the author breaks in, he says he could almost see something funny in one way of telling this "not at all comic" story. I personally didn't find much intentionally funny, but it's definitely threaded through the story somehow.
Probably the closest thing to funny is what I take to be the true theme: "Don't ever ask the nanny nothin'." She definitely waxed whacked-out when describing the Sandman.
Anyway - I'm kind of mixed on this story. No hate; no love. Before reading this, I read "Ritter Gluck" and I probably prefer it. While it's not as grotesquely striking and structurally complex, the flaws and nitpicks were largely absent and there was a fun fluidity to the story that makes a similar difficulty in finding any "ground" in the story more acceptable.
Computer text makes my eyes jump around like crazy (one of those reader types who just picks up enough salient words to know what's going on). 
