If you haven't seen it yet, we recommend trying to solve it before reading further (as with any logic puzzle).
Here's the puzzle as worded by Randall, here's its solution, and here is the main thread discussing its solution. This post by Xias on that thread inspired me to create this particular thread, intended to serve as a kind of FAQ for the puzzle.
Following are some common objections to the solution, each one in bold. Underneath the bolded objection is an elaboration in italics, meant to provide support for the objection's argument and add more detail as to what someone making this objection might be trying to say. Both the bold and italics part are therefore being stated by the same hypothetical person, not different ones. In reality, I myself wrote the whole thing — there are no actual quotes of anyone else intended, just paraphrases of common ideas.
After each objection and elaboration comes my response. Each response is in a spoiler, more to avoid a wall of text than to hide any actual "spoliers"; I presume you won't read this until having learned the problem and solution (by one means or another) beforehand.
Within these responses I often use italics for emphasis and bolding for a "stronger" emphasis. Sometimes, italics are used to help distinguish some parts of a sentence from others, which might be helpful in understanding things like "A thinks that B thinks that C thinks…". (This style of mine has nothing to do with the bolding of the original objections and italicizing of their elaborations.)
There's enough text in this thing as a whole that I've split it into two parts. Part 1 deals with seven objections, Part 2 with the remaining ten. You can read the responses in any order you like, but since I wrote them just the way you see here (EDIT: Except for edits, of course), they'll probably make the most sense in that order.
In general, this is meant to address the problem whereby new posts and/or new threads raise the same points again and again, by people who were unwilling to read 25 pages of posts. So I read 'em for you, and I hope I managed to distill everything decently here. No more excuses, yes?
Feel free to post on this thread if you wish to add another common objection which you don't see here, or if you think I can be clearer with some of my responses, etc. If you wish to argue against the actual content of one of my responses (and by extension, to defend an objection), you may do so, but don't expect others here to be very happy about it, or to be convinced.
Let's begin!
1. The Guru's statement, "I can see someone who has blue eyes", does not provide new information to the islanders.
Everyone already knew that. No one will ever leave.
2. I knew what common knowledge was (or, now I do). In this situation, "At least one person has blue eyes" was already common knowledge.
We can easily deduce that everyone already knows that everyone knows that everyone knows, ad infinitum.
3. Yes, with just one blue-eyed person, it wasn't common knowledge, nor with two, or possibly three. But with over ninety blue eyes, it's obviously common knowledge.
Hypothetical blue-eyed islander A sees 99 blues. A knows that B sees at least 98 blue eyes. Clearly, A should know that B knows that C sees at least 98 blue eyes, because A can see C seeing the 98 other blue eyes, and A can see that B can see C seeing the 98 other blue eyes. Combine these two facts, and it is clear that the minimum possible number of blue-eyed people whose existence is common knowledge is 98, not 0 or 1.
4. Who on that island could possibly believe that no one with blue eyes lives there?
In order for the puzzle to work, each islander is hypothesizing an islander who sees no blue eyes— but they all already know that no such islander exists.
5. Yes, it works if there are just one or two blue-eyed people, but not three or more.
Induction cannot prove everything.
6. I knew that it works for three (or, now I realize that). But it breaks down at four.
I have a very good reason to say it breaks down at four. (Different people provide different reasons here.)
7. It works for one, two, three, or four. It stops working at five.
I know the induction thing is looking good for you so far, but trust me, it doesn't keep going forever.