How we cite our quotes: (Part.Book.Chapter.Paragraph) We use the P. A. Motteux translation from 1712 for our quotes. Some familiar character names appear differently in this edition (Sancho Panza is Sancho Panca here, Rocinante is Rozinante, and Doña Rodriguez is Donna Rodriguez). We preserve Motteux's spellings in our quotes but use the more familiar versions of these names in our analysis.
Quote #1
Having thus lost his understanding, he unluckily stumbled upon the oddest fancy that ever entered into a madman's brain; for now he thought it convenient and necessary, as well for the increase of his own honour, as the service of the public, to turn knight-errant. (1.1.1.8)
Don Quixote's descent into madness is by no means gradual. In fact, Cervantes sums it up in this one sentence. An old dude read too many fantasy books and decided that he wanted to start living the fantasy himself. Now there's nothing wrong with living a fantasy if it doesn't put anyone in danger. The only problem is that Don Quixote's fantasy of being a knight involves randomly attacking people and helpless sheep.
Quote #2
At those words they made a halt to view the unaccountable figure of their opponent; and easily conjecturing, both by his expression and disguise, that the poor gentleman had lost his senses, they were willing to understand the meaning of that strange confession which he would force on them. (1.1.4.4)
When Don Quixote first hits the road, he soon comes across some strangers and decides what the heck, there must be some sort of adventure about to happen. The people, on the other hand, don't know what to make of Don Quixote and figure right away that he must be a crazy old man. You're going to have to get used to that, because that's the general response Don Quixote will get for the rest of the book.
Quote #3
All the rest of the company gave great attention to this discourse; and even the very goatherds and shepherds were now fully convinced that Don Quixote's brains were turned topsy-turvy. But Sancho Panca believed every word that dropped from his master's mouth to be truth, as having known him from his cradle to be a man of sincerity. (1.2.5.7).
On some level, Sancho Panza knows that his master is an eccentric, sometimes foolish man. But at the same time, he has known Don Quixote his whole life and believes him to be a good, rational man. Throughout this book, Sancho sees the Don do some crazy things. But he doesn't think of the Don himself as crazy. There's a difference.