Yes, all of what we have postulated upon are possible interpretations of this song!
Shortly after David Harris was released from prison, he and Joan Baez appeared to speak at a peace rally that I attended that was held in Memorial Chapel at Stanford, where David Harris had been Student Body President before his incarceration. All of that happened before Sad-Eyed Lady was written, yet it was also by that time after the early days when Dylan and Joan Baez were first an item together around the Sur. And so the song was also written after Dylan began with Sara Lownds. I would say that it is therefore entirely possible that Dylan actually had three muses from which he drew inspiration for that song, and all three of them could have possibly visited him together, as part of a dreamlike sequence.
I do not think for a second that any of what Bob Dylan has ever said in any of his songs, was written because he was going for what sounded best. I think all of his words, on some level, refer to something that has been on his mind. Sadly, I cannot say the same for most of the people who have tried to imitate him in their song writing.
Counter to that, it was fascinating for me to read a description about the conversation that ensued between Dylan and Jackson Browne, one night when Dylan showed up backstage at McCabe's in Long Beach, after Jackson had just finished performing. It has been said that Dylan did not show up that night by accident, as by that time Jackson's reputation had preceded himself as a song writer who was more than worth while listening to. As far as I know, Dylan never thought of their meeting again; however Jackson made reference to it in one of his early songs, "Looking Into You" that was written for someone who at the time held a romantic interest for him (probably Phyllis Major). Towards the end of the song, he mentions his meeting with Dylan in a verse that says:
Ah, the great song traveler passed through here
And he opened my eyes to the view.
And I was among those who called him a prophet,
And I asked him what was true.
'Till the distance had shown,
Now the road remains alone.
Now I'm looking in my life
For the truth that is my own.
We'll I looked into the sky for my anthem,
And the words and the music came through.
But words and music can never touch the beauty that I've seen
Looking into you.
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