A guy I work with is fairly knowledgable re: Dylan, even at his age. His brother is a huge Dylan-phile and owns MANY bootleg concert tapes/discs...
Anyhoo....he told me about an interview that supposedly took place after Hendrix covered "All Along The Watchtower". Dylan was asked what he thought about the Hendrix treatment of his song and he allegedly said something to the effect that he went out every night and tried to play it like Jimi did, to no avail....
:-0
Dylan loves to have his songs covered, as the royalty checks do help.
I saw Roger McQuinn in concert about ten years ago, he told a story about Dylan, who had been approached by by a record producer who wanted to record him. Dylan said no, but also told him:
You want something, here:
"Give that to McQuinn, he'll make something of it."
Song writing is an art and a gift and Dylan is one of the best ever at it.