Presently re-reading the intro to Swanson's translation by Donner and Stevenson.
Relevant to the present discussion of Guanding's introduction and recitation of lineage, Donner & Stevenson discuss how the Western tradition (Indian lineage) represents the doctrinal tradition while the Chinese sages represent the wisdom gained through practice. I thought this passage they quoted from the MHCK is something that might be helpful to keep in mind -
Understanding [that is, learning] purifies practice, and practice promotes understanding. Illuminating and enriching, guiding and penetrating, they reciprocally beautify and embellish one another. They are like the two hands of a single body, which, working together, keep it clean. [Yet this synthesis of learning and practice] is not just a matter of clearing away impediments and overcoming obstacles in order to inwardly advance one's own enlightenment. One must also achieve a thorough comprehension of the sutras and treatises so that one can outwardly reveal to others what they have not heard before. When one combines one's own training with the training of others, benefit is then complete. If on such as this is not the teacher of all humankind and the jewel of the nation, then who is?
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Growing up, I was exposed to the, "blue dye" teaching. Nichiren's interpretation of this passage conforms to the implication of the Xunxi, ie. "Blue dye derives from the indigo plant, and yet is bluer than the plant. Ice comes from water and yet it is colder than water... "
T’ien-t’ai states, “From the indigo, an even deeper blue.” This passage means that, if one dyes something repeatedly in indigo, it becomes even bluer than the indigo leaves. The Lotus Sutra is like the indigo, and the strength of one’s practice is like the deepening blue.
The quote attributed to Zhiyi (T'ien-t'ai) seems to be an interpretive translation conveying the Xunxi. We can also set aside Nichiren relating the Lotus Sutra to the indigo plant. Notwithstanding, Nichiren's interpretation seems to conform with the Xunxi and Guanding. I think its relevant to note Guanding's remark in Fahuaxuanyi, praising Zhiyi, “Even the great scholars of India were not in a class with him, and the Chinese teachers—well, one need hardly mention them. This is no idle boast—the doctrine he taught was indeed of such excellence.” (I don't have Swanson's translation with me, so I am quoting a translation of this passage as it is found in a translation of Nichiren's
Kanjin no Honzon sho.
Zhiyi remarked in MHCK - "Vasubandhu and Nāgārjuna internally had insight and were enlightened, and externally each responded appropriately to the needs of their times on the basis of tentative means. However, some [Buddhist] teachers have a one-sided understanding, and some scholars are carelessly attached [to their own limited interpretation], so that they [argue and fight uselessly,] like shooting arrows at a rock. They each maintain one extreme, and thus pervert the noble path." (I don't have the text in front of me and am quoting from one of Swanson's drafts of the section,
"Objects as Inconceivable" From the Perspective of Contemplating the Middle: Beyond all Dualities (Including "Non-duality")"
So before people get excited, my understanding of these passages is not that Zhiyi was considered categorically superior to everyone who had appeared since the Buddha's parinirvana, but that the insight he had and his spontaneous exposition on the Dharma surpassed any of his contemporaries in China or India.
All this is to make the point, my understanding of the reference to the indigo dye is that by immersing ourselves in the teachings, we surpass the teachings. I'm not sure that this should be considered particularly controversial - the real proving ground of dharma is not found in textual analysis or even its exposition, but in the sublime realization and the profound relations with others as a conduit of the buddha wisdom. In other words, there is a reality beyond the particular textual teachings that is greater than its means of conveyance. I think this comes into focus when the rest of the MHCK, particularly the Sudden & Perfect, is taken into account. Zhiyi himself refers to the actual teachings as "Inconceivable".
It would be interesting to see the rest of the context of Zhanran's comments on this subject. FWIW, I don't think Nichiren was introducing a novel view, and suspect it was at least a minority interpretation within the Tendai in the 13th c.?