The second misunderstanding occurs when Jesus discusses Jewish ancestry. Jesus is talking about spiritual affiliation shown by "works" (8:38-41), whereas the Jews initially understand him in terms of natal ancestry from Abraham (8:33). When the Jews insist that "Abraham is our father" (8:33, 39), Jesus does not dispute the claim. Rather, he simply maintains that it is possible to be a physical descendant of Abraham but a spiritual son of Satan.

If you were Abraham's children, you would be doing the works Abraham did, but now you seek to kill me, a man who has told you the truth that I heard from God. This is not what Abraham did (8:39-40).

The allusion here is probably to Genesis 18 when YHWH appears before Abraham, and Abraham provides a great feast and receives the blessing of a son. Abraham accepts the word of YHWH and certainly does not try to kill him. Now, however, when God appears as the Messiah to the Jews, they reject his word and blessing and try to kill him. Hence, they are doing exactly the opposite of the deeds of Abraham, and cannot claim to be his sons.

When Jesus says, "I speak of what I have seen with my Father, and you do what you have heard from your father" (8:38-41), he means that the Jews do the works of their spiritual father, Satan (8:44). What exactly does this mean? The Devil was "a murderer from the beginning" and is the "father of lies" (8:44), probably alluding to Satan lying to deceive Eve (Gen. 3:1-6; 2 Cor. 11:3; 1 Jn. 2:22), and inspiring the first murder by Cain (Gen. 4:8; 1 Jn. 3:10-12). Thus when the Jews reject the truth spoken by Jesus, and seek to kill him for blasphemy and violation of the Sabbath, they are following the desires of the father of lies and murder, and hence are his children. Jesus' conclusion is straightforward and unequivocal: "You [Jews who reject Jesus] are of your father the devil, and your will is to do your father's desires. He was a murderer from the beginning, and has nothing to do with the truth, because there is no truth in him" (8:44).

For modern readers, ensconced in a culture demanding tolerance, this is rather brutal dualism—you are either a son of God or a son of Satan. As we noted earlier, however, cosmic dualism is a characteristic of the Gospel of John. In a cosmic sense, you are either for God or against God—there is no middle ground. If you are not for Jesus, you are against him. In this world/kosmos, whose ruler is Satan (12:31, 14:30, 16:11), your allegiance is manifest by whose disciple you are, and whose will you fulfill. Thus, even if unwittingly, those who fulfill the will of Satan by rejecting and killing Jesus inevitably become his children. Jesus makes this position clear: "If God were your Father, you would love me, for I came from God" (8:42), and "whoever is of God hears the words of God. The reason why you do not hear them is that you are not of God" (8:47).

The Jewish response is to reverse this argument. First, they insist that "we have one Father, even God" (8:41), referring to biblical concepts of Israel as the children of God (Ex. 4:22; Dt. 14:1-2, 32:6; Is. 64:8; Jer. 39:1; see also Jn. 11:51-52; 1 Jn. 3:1-2). From the Jews' perspective, Jesus' blasphemy and sin proves to them that he is possessed by a demon (8:48). Hence, the "Father" of whom Jesus speaks so often is not really God, but Satan, who has possessed Jesus. It is Jesus who is deceived by Satan, not the Jews. The rift emerging between Jesus and his critics is thus exacerbated. And the reader is forced to decide: who really is of God, Jesus or his Jewish critics?

For a complete version with notes, see DropBox
http://dl.dropbox.com/u/15865520/Enigmatic%20Mirror/EM-John%208c.pdf

Or (Academia.edu):
http://byu.academia.edu/WilliamHamblin/Papers/669461/Satan_Father_of_the_Jews_or_of_Jesus_Jn._8_31-47_