Again, I think what trips us is the wording and language. Perhaps illustration and imagery could be more instrumental. With syntax, it is easy to get tangled up and arrive at seeming contradictions. I think this is where K lost a lot of his audience.
I will give it a try the way I understand it. I would appreciate discussion and feedback.
Imagine a universe that exists beyond the confines of time. That universe is everything at any time. It is you in the past, it is me in the future, it is a tree, it is an ant, it is a quasar, a subatomic particle, light, a car, a fruit. It is everything anytime.
Now we extract ourselves from this universe so we can be present in our physical reality. We are just one collection of cells, atoms, brain, other organs, etc. At one discrete time. We are separated from our environment, other organisms, and all celestial bodies. We travel through this universe as a discrete package, a bundle of nerves, a unique consciousness.
This is necessary for life to exist. If we were not separated, we would not be able to function. We would not be able to hunt and fend for our food, organize ourselves socially, or defend ourselves from a predator (I know that is a bit of a circle concept - the other side of the food-gathering coin. Nevertheless).
When we travel through this universe as individuals however we do so primarily through the means of separating ourselves from our experiences, thus the observer and the observed. But ultimately we still are part of the universe as a whole.
The only way for us to transcend this physical separation and experience the universe as a whole. Is by bypassing the ‘observer’. By ignoring our individual context for the observation. Instead observing it without a filter, or without a context grounded in being unique individuals, separated from the universe.
This context is built by us through time. We process our observations and fit them into the context of our separate identity and existence. This is why K says the Observer is time. It’s confusing. The observer is NOT time. It is a product that comes into existence through time, as we seek to anchor an experience to our unique individual interpretation of the universe. It is however dependent on time.
Does this make sense to anyone?