Luther on Justification- "I myself, even though I teach it publicly have a great difficulty in believing it privately"

Recently, I was sent this obscure Luther quote:

“There is no religion in the whole world that teaches this doctrine of justification. I myself, even though I teach it publicly, have a great difficulty in believing it privately” (Werke, 25, p. 330, in Franca., p. 158).

If you search out this quote you'll come across a few pages of similar content. For instance this web page is entitled: Luther Thought He Was Divine! The quote is one of a handful of out-of-context quotes painting Luther as a gross antinomian. This quote is used to prove  justification by faith alone is a "doctrine ... so bizarre that even Luther himself could scarcely manage to believe in it." Luther didn't even believe what he taught?

Polemical Source
The quote was admittedly taken from a Roman Catholic secondary source: Fr. Leonel Franca, S.J., A Igreja, a Reforma, e a Civilização [The Church, the Reformation, and Civilization] (Rio de Janeiro, 1934). "Fr. Leonel Edgar da Silveira Franca, S.J., one of the founders of the Pontifical Catholic University of Rio de Janeiro, Brazil and its first Rector (1941 -1948)." The quote can be found on page 151 of his book:

escreve o próprio LUTERO: "Nenhuma religião há, em toda a terra que ensine esta doutrina da justificação: Eu mesmo, ainda que a ensine publicamente, com grande dificuldade a creio em particular". Weimar, XXV, 330.

Primary Source
Whoever pulled this quote from Franca's The Church, the Reformation, and Civilization had to translate it into English, so it's twice removed from the original Latin. However, the reference was helpful: WA 25, 330 (cf. Exegetica opera Latina, Volume 23, 140).

Est autem nulla religio iu orbe terrarum, quae hanc sententiam de iustificatione admittat, et nos ipsi privatim aegre eam credimus, quanquam publice eam doceamus. Ideo quoque diligentius hic locus cognosci debet, quod sit ceu fundamentum, quo Novum testamentum seu Euangelion nititur, qui solus nos et religionem nostram ab omnibus aliis religionibus distinguit. Soli enim Christiani hunc locum credunt et sunt iusti, non quia ipsi operantur, sed quia alterius opera apprehendunt, nempe passionem Christi. Qui igitur hunc articulum credit, ille tutus est ab omnibus erroribus et necessario ei aderit Spiritus sanctus. Neque enim sine Spiritu sancto doceri aut cognosci potest. Qui autem ab hoc articulo exciderunt, illi expositi sunt omni vento falsae doctrinae.

This quote is from Luther's material on Isaiah 53. Some of the material is found in WA 31(2), some of it is found in WA 25 (pp. 79-401). The material in WA 31 comprises of lectures transcribed and recorded by those who heard Luther give these lectures. The material in WA 25 comprises of scholia. Therefore, taken together, Luther's notes and lectures comprise his material on the book of Isaiah. LW chose to translate the material from WA 31 with clarification from Luther's scholia ("... there is neither need nor even justification for relying on the scholia, and we have decided to translate the version closest to Luther himself").

Context
If one compares the scholia and the lectures on Isaiah 53 there is indeed harmony in thought.

The quote above roughly translates: 

But there is no religion in the entire world which admits this teaching of justification, and we ourselves believe it in private with difficulty, though we publicly teach it. Therefore this doctrine must carefully be known, as being the foundation, which the gospel and New Testament is based. It alone  distinguishes us from all other religions. Christians believe they are justified, not because they themselves work, but because they receive another's works, namely, Christ's work. Therefore he who believes this article is safe from all errors and necessarily will be with the Holy Spirit. For without the Holy Spirit it cannot be taught or known. But he that falls from this article are exposed to every wind of false doctrine.

This scholia would fit into this section 5 of Luther's lecture on Isaiah 53:

4. Surely He has borne our griefs and carried our sorrows; yet we esteemed Him stricken, smitten by God, and afflicted.
This states the purpose of Christ’s suffering. It was not for Himself and His own sins, but for our sins and griefs. He bore what we should have suffered. Here you see the fountain from which St. Paul draws countless streams of the suffering and merits of Christ, and he condemns all religions, merits, and endeavors in the whole world through which men seek salvation. Note the countless sects who to this day are toiling to obtain salvation. But here the prophet says, “He for us.” It is difficult for the flesh to repudiate all its resources, to turn away from self, and to be carried over to Christ. It is for us who have merited nothing not to have regard for our merits but simply to cling to the Word between heaven and earth, even though we do not feel it. Unless we have been instructed by God, we will not understand this. Therefore I delight in this text as if it were a text of the New Testament. This new teaching which demolishes the righteousness of the Law clearly appeared absurd to the Jews. For that reason the apostles needed Scripture, Surely He has borne our griefs. His suffering was nothing else than our sin. These words, OUR, US, FOR US, must be written in letters of gold. He who does not believe this is not a Christian. Yet we esteemed Him. We thought that He was suffering because of His own sin, as it were. In the eyes of the world and of the flesh Christ does not suffer for us, since He seemed to have deserved it Himself. This is what the prophet says here too, that He was judged guilty in the eyes of the world. It is therefore difficult to believe that such a one suffered for us. The Law is that everybody dies for his own sins. Natural reason, and divine as well, argues that everybody must bear his own sin. Yet He is struck down contrary to all law and custom. Hence reason infers that He was smitten by God for His own sake. Therefore the prophet leads us so earnestly beyond all righteousness and our rational capacity and confronts us with the suffering of Christ to impress upon us that all that Christ has is mine. This is the preaching of the whole Gospel, to show us that Christ suffered for our sake contrary to law, right, and custom. He expounds more fully what His suffering for us means.

5. He was wounded.
 The prophet is eloquent in describing the suffering of Christ. Word by word he expounds it in opposition to the hardened Jews. Do you want to know what it is to bear our sins, that is, what it means that He was wounded? Here you have Christ delineated perfectly and absolutely, since this chapter speaks of Him. Christ is a man, a servant of the Word, who by means of suffering bore our sins. What will the unrestrained Jew answer in opposition to this delineation? From this you must infer how far apart are the teachings of Paul and the pope. Paul clings to Christ alone as the sin bearer. By means of this one word, “Lamb of God” (John 1:29), John the Baptist understands this Levitical sacrifice, that He suffered for the sins of all. It follows, then, that the Law and merits do not justify. Away with the Antichrist pope with his traditions, since Christ has borne all these things! I marvel that this text was so greatly obscured in the church. They note the concern of Scripture that faith without works is dead, and we say the same thing. In public argument, however, we say that works are indeed necessary, but not as justifying elements. Thus anyone may privately come to the conclusion, “It is all the same whether I have sinned or whether I have done well.” This is hard for the conscience to believe, that it is the same and in fact something angelic and divine. Therefore this text draws the following conclusion: “Christ alone bears our sins. Our works are not Christ. Therefore there is no righteousness of works.” Surely none of the papists can escape this fact when he sees Scripture as a whole, that Christ has accomplished all things for justification and therefore we have not done it. Appeal to works, rewards, and merits and make much of them in the realm of outward recompense. Only do not make them responsible for justification and the forgiveness of sins. We can preach and uphold this passage in public, but we can only believe it with difficulty in private. If we preserve this article, “Jesus Christ is the Savior,” all other articles concerning the Holy Spirit and of the church and of Scripture are safe. Thus Satan attacks no article so much as this one. He alone is a Christian who believes that Christ labors for us and that He is the Lamb of God slain for our sins. While this article stands, all the monasteries of righteousness, etc., are struck down by lightning. In the light of this text read all the epistles of Paul with regard to redemption, salvation, and liberation, because they are all drawn from this fountain. A blind papacy read and chanted these and similar words as in a dream, and no one really considered them. If they had, they would have cast off all righteousness from themselves. Hence it is not enough to know and accept the fact. One must also accept the function and the power of the fact. If we have this, we stand unconquered on the royal road, and the Holy Spirit is present in the face of all sects and deceptions. When this doctrine is safe, we firmly stand up to all people, but where this article is lost, we proceed from one error to the next, as we observe in the babbling Enthusiasts and in Erasmus. Our nature is opposed to the function and power of Christ’s Passion. As far as the fact itself is concerned, both the pope and the Turk believe it and proclaim it, but they do not accept its function. As for you, lift up this article and extol it above every law and righteousness and let it be to you a measureless sea over against a little spark. The sea is Christ who has suffered. Your works and your righteousness are the little spark. Therefore beware, as you place your sins on your conscience, that you do not panic, but freely place them on Christ, as this text says, “He has borne our iniquities.” We must clearly transfer our sins from ourselves to Christ. If you want to regard your sin as resting on you, such a thought in your heart is not of God but of Satan himself, contrary to Scripture, which by God’s will places your sin on Christ. Hence you must say: “I see my sin in Christ, therefore my sin is not mine but another’s. I see it in Christ.” It is a great thing to say confidently: “My sin is not mine.” However, it is a supreme conflict with a most powerful beast, which here becomes most powerful: “I behold sins heaped on Christ.” Thus a certain hermit who was extremely harassed by Satan could not evade him, but said: “I have not sinned. Everybody must look upon his conscience as free.” He did not answer well because he did have sin. This is what he should have said: “My sins have been transferred to Christ; He has them.” This is the grafting of the wild olive into the olive tree. It is not without purpose that the prophet uses so many words in this article, since it is necessary for a Christian to know that these are his own sins, whatever they are, and that they have been borne by Christ, by whom we have been redeemed and saved. This is the Savior, etc., from eternal damnation, from death, and from sin. So by this thunderbolt the Law and its righteousness are struck down, as you see Paul treat this matter in detail.


Something further must be noted, lest those who do not feel this despair. There Satan can turn the antidote into poison and the hope into despair. For when a Christian hears these supreme consolations and then sees how weak he is with regard to his faith in them, he soon thinks that they do not apply to him. In this way Satan can turn consolation into distress. But as for you, however weak you are, know that you are a Christian, whether you believe perfectly or imperfectly, even while weakness and a feeling of death and sin remain with you. To such a person we must say: “Brother, your situation is not desperate, but pray together with the apostles for the perfection of your faith.” Paul also struggled with this problem and was deeply disturbed. A Christian is not yet perfect, but he is a Christian who has, that is, who begins to have, the righteousness of God. I say this for the sake of the weak, so that they will not despair when they feel the bite of sin within themselves. They should not yet be masters and doctors but disciples of Christ, people who learn Christ, not perfect teachers. Let it suffice for us to remain with that Word as learners. Therefore, however perfect and absolute the teaching of Christ is that affirms that all our sins belong to Christ, it is not perfect in our life. It is enough for us to have begun and to be in the state of reaching after what is before us. Hence a Christian man must be especially vexed in his conscience and heart by Satan, and yet he must remain in the Word and not seek peace anywhere else than in Christ. We must not make a log or a rock out of the Christian as one who does not feel sin in himself. This is the claim of the exceedingly spiritual Enthusiasts.[LW 17:221-225]

Conclusion
"This doctrine is so bizarre that even Luther himself could scarcely manage to believe in it" hardly follows from Luther's lecture. In context that which was beyond belief was "Christ alone bears our sins. Our works are not Christ. Therefore there is no righteousness of works."