1) I think that this is a fairly safe interpretation.
2) No and I think that this is the whole point, they were blind to the truth, they could not understand.
3) As the covenant was a covenent of Grace I am not sure that it took anything to break the covenant, it was God's sovereign choice.

__________________
Mike
London City Presbyterian Church
London
England

"Surely, we wish to be orthodox, but we must first learn what real orthodoxy is. Surely, we wish to be progressive, but we must first have a basis to progress from."