According to Protestants following the Reformation, what did Jesus mean when he said "do this and you will live"? According to the Reformers, man is saved by faith alone in Christ alone, through grace alone, and not by any works- anything they can do. Consider the following passage from Luke. 


  Luke 10:25–28 (NASB) And a lawyer stood up and put Him to the test, saying, “Teacher, what shall I do to inherit eternal life?” And He said to him, “What is written in the Law? How does it read to you?” And he answered, “You shall love the Lord your God with all your heart, and with all your soul, and with all your strength, and with all your mind; and your neighbor as yourself.” And He said to him, “You have answered correctly; do this and you will live.”


It seems here that according to Jesus, one lives by doing the Law, since he says the "correct" answer to the Lawyer's question is this commandment of the Law, found in Deuteronomy 6:5. How do the Reformers and Protestants after them who hold to the doctrine of Sola Fide reconcile this verse with that doctrine?
Protestants typically argue that Jesus is explaining how one might be "saved by works," and not suggesting that it is actually possible for the man to accomplish it on his own – on the contrary, he implies that it is impossible.  John Gill's analysis is helpful:


  Our Lord intimates by this, that, according to the tenor of the law, eternal life was not to be had without a complete and perfect performance of the duties of love to God, and to the neighbour, contained in these words; and this he suggests, in order to convict him of the impossibility of obtaining life by the works of the law, since such a performance cannot be made by man.


John Calvin argues that the Law teaches men how they could "obtain righteousness by works" – if someone obeys it perfectly, that person does not need justification.  But no one can obey it.  The lawyer realizes this in verse 29:


  But wishing to justify himself, he said to Jesus, “And who is my neighbor?” (NASB; emphasis added)


Calvin describes his attitude:


  So then, aware that the test of charity would prove unfavorable to him, he seeks concealment under the word neighbor, that he may not be discovered to be a transgressor of the Law.


And in addition to using this statement to make the point that the man was a sinner, Calvin suggests that Jesus intended to rebut the implication that he did not value the Law:


  It was the intention of Christ, in the meantime, to vindicate himself from the calumny which, he knew, was brought against him by the unlearned and ignorant, that he set aside the Law, so far as it is a perpetual rule of righteousness.





Calvin, Commentary
Gill, Exposition


Thomas Constable's treatment is helpful as well.