As discussed previously, it seems unjust to me to attribute to Martin Luther the invention of the notion that Judaism was characterized by works-righteousness. Whether the interpretation is right or wrong, it is one Luther drew upon from his predecessors, not one born of his own mind. Likewise, Luther is not the first to pit Paul against such legalism, a tendency that can be seen as early as Augustine's dispute with Pelagius (1).
What Luther did do, however, was bring these views to the forefront, and enhance the analogue between them and the Catholic Church, motivated not least by his doctrine of solo fides, or justification by "faith alone." He found both Jew and Catholic lacking on this front, and could thus consider Paul to have been addressing both. Thus, for example, Luther writes on Gal 3:19
The Jews had the opinion that if they kept the law they would be justified thereby.(2)
And on Gal 4:10
I have known many monks in the Papacy, which with great zeal have done many great works for the attaining of righteousness and salvation, and yet were they more impatient, more weak, more miserable, more faithless, more fearful, and more ready to despair than any other. The civil magistrates who were ever occupied in great and weighty affairs, were not so impatient, so fearful, so faint-hearted, so superstitious, and so faithless, as these justiciaries [and merit-mongers] were.(2)
This interchangability--finding in Paul conemdnation of both Jew and Papacy--is a view he would compound throughout his discussion. Luther seemed to find in Paul an uncanny semblance of his own disagreements with the Roman Church. So much so that the terms "Jews" and "Papacy" are all but interchangable in Luther's work on Galatians.
Luther's analogue is made more clear in his comments on Gal 4:3, where the comparison is explicit:
These outward virtues and honest conversations be not the kingdom of Christ, nor the heavenly righteousness, but the righteousness of the flesh and of the world; which also the Gentiles had, and not only the merit-mongers, as in the time of Christ the Pharisees, and in our time the monks and friars(4)
While much more could be spent on Luther's position both on Paul and Judaism, neither are necessary here. Suffice to say that Luther was history's most vociferous proponent of Judaism as works-righteousness, and that his voice was loudest when comparing it to Catholicism. He may not have started the ball rolling, but he does appear to have been guilty of finding in Paul a reflection of self.
Next we'll take a whirlwind look at commentators between Luther and Bultmann, before getting to the more interesting (at least to me) subject matter: Covenantal Nomism. The next section will be heavily dependent on Sanders' Paul and Palestinian Judaism and Neusner's Encyclopedia of Judaism for both the chronology and summaries (some of which I've verified, some not so much, notes will be made accordingly) of the positions of various scholars falling in that chronological range.
(1) Erwin Fahlbusch and Geoffrey William Bromiley, The Encyclopedia of Christianity, (Grand Rapids, Mich.; Leiden, Netherlands: Eerdmans; Brill, 1999-2003), 3:93-94.
(2) Martin Luther, Commentary on Galatians, Gal 3:19.
(3) Martin Luther, Commentary on Galatians, Gal 4:10.
(4) Martin Luther, Commentary on Galatians, Gal 4:3.