[1] This is a very difficult story to read. The pronoun references are unclear, especially since Chinese does not distinguish between "him" and "them." Similarly, you can't always be sure who or what is the subject of the verbs. In this case, you can't tell if the subject of discussion is Laozi or the mourners at his funeral, or people in general. It is hard to believe that such thorough-going ambiguity isn't at least partially intentional. At this risk of too many notes, I will try to keep you apprised of the alternatives.
[2] This could be about Laozi and mean either, "I used to take him for The Man but now no longer (because of the low caliber of mourners at his funeral)" or "I used to think of him as a (living) person but now no longer (because he is dead)." Or it could be about the fellow mourners, "At first I thought of them as (proper) people, but now no longer (because of the way they behaved)."
[3] Or "They say things they don't want to say and mourn when they don't want to mourn." They are insincere, as people at funerals often are.
[4] Or "They run from heaven, deny their essence, forget what the've been given."
[5] Or "they suffer." This same line appears in 8:12. It is also reminiscent of Confucius's description of himself as "punished by nature" in 6:06. Compare Analects 3.13: 獲罪於天,無所禱也。"When you commit a crime against nature/heaven, there is nowhere you can turn."
[6] It is unclear to me whether Qin Shi is
- criticizing the students students for not being as content with their teacher's departure as they were with his arrival;
- criticizing Laozi for failing to fly under the radar like the true sage of 1:03;
- or bemoaning the tendency of people in general to resist the impermanent nature of existence.
I suppose it could be all three if we assume that the desire for fame is an attempt to escape mortality.
The last line is gruesome. I don't think the "this" can refer to the behavior (either of Laozi or of the mourners) that he has been criticizing. I think it must refer to death, and his sentiment is in line with the three friends of 6:06 who "think of life as a hanging tumor and a dangling mole and of death as a lost wart or a bursting boil." In this case, according to Qin Shi, what we think of as life would be a hanging corpse and death would be its release. Is Is Qin Shi really speaking for Zhuangzi here? The difficulty may come from the desire (perhaps just my own) to classify characters either as sages or fools when, as often as not, they are people in a process of change.