In the second paragraph, Luther discounts all claims that he has ever publicly insulted pope Leo X, he vows that he has not either verbally or in writing, and concedes that he has called him a “Daniel in Babylon” (which would mean-in plain speak-I think you’re a good guy, but I also think you’re letting godless heathens control your life, and I admit that, yes, I have said that publicly*). In this admission we see Luther speaking down to Leo and perhaps even attempting to remind him that he has made public efforts to shame him for associating- and maybe even lowering himself in what Luther perceives as servitude- with extravagant sinners (the hoarding members of the bishopric in Rome. These are the “godless flatterers” to which he makes reference.)

We might read this as sarcasm, or we might read this as a confession that he has known of a misunderstanding between the two of them, and that he doesn’t hate Leo (since he is christian he loves all men) but rather he hates that such a noble office (the highest representative of god) has fallen into such decay and now makes claims that seem to assert a level of power higher than that which the office is meant to represent. As David is a noble biblical figure we might figure the latter. He does go on to say

“…you, Leo, sit as a lamb in the midst of Wolves [Matt. 10:16] and like Daniel in the midst of lions [Dan. 6:16]. With Ezekiel you live among scorpions [Ezek. 2:6]. How can you alone oppose these monsters? Even if you would call to your aid three or four well-learned and thoroughly reliable cardinals, what are these among so many? You would all be poisoned before you could begin to issue a decree for the purpose of remedying in situation.”

and from this we get an important idea on how to read the letter. He has been thoroughly insulting the papacy. He has received a letter from the leader of Europe ordering him to stop. He clearly does not put much trust in him (that is, he puts little faith in Leo). He knows he is popular. He is reminding the pope that he has a chance to say that he didn’t realize he was surrounded by such awful people, and to say that he has seen the light, and perhaps appoint Luther as the head of a reform movement, or at least try. I believe Luther knew that his cautious words of wisdom, his gentle reminder, would not be received warmly, and I don’t think he cared.