Flashbacks: Misunderstanding, Life, Revelation
Misunderstanding: In John 1, "the darkness did not understand the light." In John 3, Nicodemus arrives at night, and misunderstands Jesus. When Jesus says "You must be born from above/again [anothen]," Nicodemus takes the second possible meaning, being born again, rather than the first meaning, being born from above. Further, he (perhapes jokingly) takes Jesus very literally rather than figuratively. Jesus intends to talk about birth from above, birth by the Spirit, but Nicodemus cannot get away from human birth. Human ancestry was crucial to Judaism, but Jesus says that divine birth is necessary to enter the kingdom of God.
There is a second element of misunderstanding in this passage. Jesus says that all those born from the Spirit become like the Spirit: no one understands their origin (birth from above) or their destiny (eternal life). This is like Jesus - throughout the Gospel, people fail to recognize Jesus' origin and destiny in heaven.
Life. Jesus talks about the new life that comes by birth from above, birth from the Spirit. He also describes the eternal life that will come to all who believe in the lifted-up Son of Man.
Revelation: Ch. 1 describes the Son as the only one who can reveal the Father. In ch. 3, Jesus is the only one to ascend and descend from Heaven , and the only one who can reveal "earthly" and "heavenly" truths.
Foreshadowing: Jesus compares his future "lifting up" on the cross to the lifting up of the serpent in Deuteronomy. The sin of Israel in the wilderness resulted in judgment through poisonous snakes. Ironically, healing came through looking at a bronze snake lifted up on a pole. Jesus likewise offers an ironic salvation: eternal life will come to those who look on and believe in one who dies an accursed death. Looking at the bronze serpent and looking at the lifted Son are both acts of faith: one must believe that God will give life through them.
Dark/light: John may be drawing our attention to Nicodemus' arrival at night, in contrast to Jesus' encounter with the Samaritan woman at midday.
Spirit: In Greek, pneuma means both spirit and wind, so 3:8 can be read as "The wind/Spirit blows where it/he wishes, and you hear its/his sound/voice, but you do not know where..."
"Born of water and Spirit" is a very difficult phrase; Christians throughout the centuries have had a variety of interpretations. However, water is commonly symbolic of the Spirit in John (see esp. John 7:37-39). Many John scholars today think that Jesus meant something like "born of water, even the Spirit."
Big idea: Jesus is greater than the great rabbis of Israel. He teaches Nicodemus that the primary requirement for entry into the Kingdom is birth from above, by the Father and the Spirit. That birth is granted to those who believe in the lifted-up Son.
The picture: Nicodemus, in Christenliche Ausslegung der Euangelienn by Johann Eck, 1530. Note that Nicodemus is wearing the appropriate clothing for a late medieval scholar, and that Jesus has a cool Trinitarian halo.