I recently re-read Nathan Pitchford's excellent short article on the reformers' hermeneutic.

His basic point is that Sola Scriptura always leads to Solus Christus.  The literal reading simply is the christocentric reading.

For Luther, the grammatical-historical hermeneutic was simply the interpretation of scripture that “drives home Christ.” As he once expressed it, “He who would read the Bible must simply take heed that he does not err, for the Scripture may permit itself to be stretched and led, but let no one lead it according to his own inclinations but let him lead it to its source, that is, the cross of Christ. Then he will surely strike the center.” To read the scriptures with a grammatical-historical sense is nothing other than to read them with Christ at the center.

And yet, claims Pitchford, many evangelicals today have a basically un-Christian reading of the OT.

[What I mean is]...  they employ a hermeneutic that does not have as its goal to trace every verse to its ultimate reference point: the cross of Christ. All of creation, history, and reality was designed for the purpose of the unveiling and glorification of the triune God, by means of the work of redemption accomplished by the Lamb slain from the foundation of the world. The bible is simply the book that tells us how to see Christ and his cross at the center of everything. It tells us who God is by showing us the person and work of Christ, who alone reveals the invisible God. If we do not intentionally ask ourselves, “How may I see Christ more clearly by this passage,” in our reading of every verse of scripture, then we are not operating under the guidance of Luther’s grammatical-historical hermeneutic. If we would follow in the steps of the reformers, we must realize that a literal reading of scriptures does not mean a naturalistic reading. A naturalistic reading says that the full extent of meaning in the account of Moses’ striking the rock is apprehended in understanding the historical event. The literal reading, in the Christ-centered sense of the Reformation, recognizes that this historical account is meaningless to us until we understand how the God of history was using it to reveal Christ to his people. The naturalistic reading of the Song of Solomon is content with the observation that it speaks of the marital-bliss of Solomon and his wife; the literal reading of the reformers recognizes that it has ultimately to do with the marital bliss between Christ and his bride, the Church. And so we could continue, citing example after example from the Old Testament.
 

So what went wrong?  How come the reformers' understanding of a "literal hermeneutic" gets used today to justify un -Christian interpretation?  Well, historically the influence of academic liberalism turned 'the literal reading' into 'the naturalistic reading'.  And that's quite a different thing. 

Nathan ends with 6 points at which the naturalistic reading fails:

1. A naturalistic hermeneutic effectively denies God’s ultimate authorship of the bible, by giving practical precedence to human authorial intent.

2. A naturalistic hermeneutic undercuts the typological significance which often inheres in the one story that God is telling in the bible (see Galatians 4:21-31, for example).

3. A naturalistic hermeneutic does not allow for Paul’s assertion that a natural man cannot know the spiritual things which the Holy Spirit teaches in the bible – that is, the things about Jesus Christ and him crucified (I Corinthians 2).

4. A naturalistic hermeneutic is at odds with the clear example of the New Testament authors and apostles as they interpret the Old Testament (cf. Peter’s sermon in Acts 2, Paul’s interpretations in Romans 4 and Galatians 4, James’ citing of Amos 9 during the Jerusalem council of Acts 15, the various Old Testament usages in Hebrews, etc.).

5. A naturalistic hermeneutic disallows a full-orbed operation of the analogy of faith principle of the Reformation, by its insistence that every text demands a reading “on its own terms”.

6. A naturalistic hermeneutic does not allow for everything to have its ultimate reference point in Christ, and is in direct opposition to Ephesians 1:10, Colossians 1:16-18, and Christ’s own teachings in John 5:39, Luke 24:25-27.

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Really great stuff, go read the whole thing.

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