"... if unfortunately there are such things in Rome as might be improved, there neither is, nor can be any reason that one should tear oneself away from the Church in schism. Rather, the worse things become, the more a man should help and cling to her, for by schism and contempt nothing can be mended. We must not desert God on account of the devil; or abandon the children of God who are still in the Roman communion, because of the multitude of the ungodly. There is no sin, there is no evil that should destroy charity or break the bond of union. For charity can do all things, and to unity nothing is difficult." - Martin Luther (Feb. 1519) [cited from Dave Armstrong's blog http://socrates58.blogspot.com/2008/06/catholic-sounding-utterances-of-martin.html]
There's an interesting article by ELCA Lutheran David Yeago, citing this case from Luther, as an example of why Donatism - while essentially being a part of Reformed and other Protestant confessions - was never Lutheran (according to him, obviously the claim is debatable).
While I still find Luther's doctrine of sin compelling and his theology of the cross, I don't think it is perfect. For instance, you can't square the Reformation teaching with that of the non-Pauline New Testament. For instance, just look at the book of Matthew: 6:15 makes salvation conditioned on a person's forgiveness of others, 7:21-23 says not all who call on Christ as Lord will be saved, and of course the famous 25:31-46 makes salvation conditioned on works or 'evangelical obedience'.
While they try to get around it by saying that they are not against works, in my opinion it still doesn't get around the salvic nature or assurance of salvation which Jesus clearly attributes to them. But no confession is perfect, there exists no explicit biblical prooftexts for the sacrifice of the mass, apostolic succession, or other key Catholic doctrines.
When it comes to the doctrine of the Church (Ecclesiology), I think Catholicism has nailed it dead on. Early Luther emphasizes the role of the keys of the kingdom and the existential assurance and peace people should have from having the church loose their sin by the administration of the sacraments. Hans Urs Von Balthasar makes the case that every wilfull breaking of communion is a case of Donatism, and that there is no reason ever to break the unity of charity, as God has declared that love "bears all things" (1 Cor 13), and that the Gates of Hell will never prevail against the Church, which is visible.
I feel like alot of what Luther wanted reformed has been changed. The Liturgies are in vernacular, the bible is read (to the point that I've heard Catholics complain about having to stand for our long readings), and the shift in other doctrines and emphasis have made the doctrine of justification by faith and works declared by Trent to be either turned Protestant in practice, or at least interpretted in the most gracious way possible.
Notice what I'm not saying. I'm not saying the word is preached. I'm not saying Trent is gone. I'm not saying I find freedom and hope in the synergistic gospel. I'm just saying I know this:
1. It is always wrong to break the unity of the church
2. I as an individual have no right to arrogate my own interpretation over and against the Augustinian tradition which has been in force for over a thousand years.
3. I as an individual nonetheless am obliged by Christ to "abide in his word" if I want to be his disciple, and thus can only preach what I find there, which may sound similar though not identical to the doctrine of Faith Alone, or at least, to emphasize above everything else, that personal conversion to Christ and trust in him alone for salvation is the essential doctrine of Christianity.
4. I cannot accept the other innovations of the Reformation (priesthood of all believers, denial of apostolic succession of bishops, denial of reverance for the saints, denial of auriculur confession).
I find in Hans Urs Von Balthasar, Schillebeeckx, and Yves Congar, (and I'm told Henri De Lubac is similar) a form of Roman Catholicism that is 'evangelical, catholic, and orthodox'. The biggest problem is, outside of Balthasar, finding Catholics that are 'evangelical', just as the problem I found in the Anglican church was finding people who were 'catholic' and/or 'orthodox'.
I guess I must say that I despise indulgences (thank God for our episcopal chair being empty at the moment, so we don't have to put up with any more of those), I no longer feel obliged to pray to the saints, and I dislike the restrictions on communion. But that is a longshot from saying I like Calvinism, or even Lutheranism as a whole. I do like early Luther when he's being Catholic, and I like that they have such a high view of unity. I think what he does best - as does Protestantism - is remind Catholicism of that truth they never like to admit, that truth which they sometimes deny, that God is not bound to the sacraments, that salvation is "of the Lord" as Jonah teaches, and that we should look to Christ for hope, not to ourselves (which the sacramental system sometimes encourages).
The other doctrine I'm really examining, is the idea that the Eucharist forgives sins, I know we say this about venial sins, but not mortal ones. I'll have to investigate more on Luther's teaching here.