The song can be viewed a variety of ways: as a "beat down" song aimed at "you" plural, the white middle class america, by black culture or the beat culture that sympathized with black culture. They mock white americas errant attempts to understand their culture. Also this song can be viewed as autobiographical. Dylan looks in the mirror with self-loathing and mockingly tells "you" singular that he does not grasp the "what it isness" of the cultural scenes he has come to witness with "pencil in hand". It can be viewed as the voice of a generation of youth telling the previous older generation that they just don't get "it". It can be viewed from point of view of god frustratedly speaking and looking down upon humanity that keeps grasping for understanding and still doesn't understand "what it is" or the "I am that I am" of the bible.

The thin man of the song is a man of very little depth and is shallow spiritually speaking.

The following are quotes from several sources regarding the beat philosophy that Dylan was living and driving him artistically at the time. These are meant to give some context to my interpretation of this song.

"The Beat philosophy was generally countercultural and antimaterialistic and it stressed the importance of bettering one's inner self over and above material possessions."

"Much of Beat culture represented a negative stance rather than a positive one. It was animated more by a vague feeling of cultural and emotional displacement, dissatisfaction, and yearning, than by a specific purpose or program.
beat, meaning down and out but full of intense conviction. We'd even heard old 1910 Daddy Hipsters of the streets speak the word that way, with a melancholy sneer. It never meant juvenile delinquents, it meant characters of a special spirituality who didn't gang up but were solitary Bartlebies staring out the dead wall window of our civilization..."[4][5]

Dylan is new to the culture of New York music scene of the culture of beats as a beat poet and musician and his artistic and spirtual journey up to this point in his career.

This is multi-layered song that can be interpreted from many different perspectives. It is a put down song about somebody who doesn't understand "what it is" both an autobiographical and spiritual song that chronicals Dylan's music career from his wide-eyed arrival at the beat scene in NYC to the annoited voice of the beat generation or star of counterculture “freak”, and ultimately to his creative collape due to pressures exerted by greedy record executives, philistine critics and demanding fans that cause him to end up in self-loathing and closing his eyes to the outside world “put eyes in pocket”

Spiritually Dylan is saying that all of us including himself "Mr. Jones" do not understand the meaning of life or "what is" This is the question that is gnawing at us in the subconscious of our lives. In the foreground we have the experiences of life or the freak show and like reporters we take note of them. We then interpret them according to our own meaning of life and he is saying that we still don't have the answer.

As a musician Dylan is comparing himself to a reporter who faithfully reports the facts and then tries to interpret those facts through his filter or voice. The NYC music scene is like nothing he has experienced growing up in middle america, Minnesota, and the music scene is like a freak show to him. He arrives “in the room” ready to observe the NYC music scene and “pencil in hand” to be a faithful witness to the truth symbolized by the “naked” performer. Frustrated by not understanding the meaning of the naked man who spiritually is Jesus and musically might be one of his heros such as Woody Guthrie he wonders what he could “say” or sing or spiritually speaking witness to the people of middle america about what he has seen “when he gets home” or has found his voice.

The next stanza Dylan struggles to make it in the NYC music scene. He has improved his musical chops "raised his head" or raised his consciousness spiritually speaking.
Dylan asks if Beat scene or his head is where he can locate the “what is” he is trying to understand. He is told by critic or audience member or performer or spiritual teacher that in fact Dylan himself owns this location of "what is" which does not seem to be the answer to his original question. In fact some don't even understand the question and ask “where what is?” That freaks him out. Maybe nobody even understands me.

Dylan by the end is worn “thin” by the world.
You walk into the room
With your pencil in your hand
You see somebody naked
And you say, "Who is that man?"
You try so hard
But you don't understand
Just what you'll say
When you get home
Because something is happening here
But you don't know what it is
Do you, Mister Jones

Dylan or “Mister Jones” walks into the “room” or club/coffee house/NYC folk/beat scene
prepared to take notes with pencil in hand or learn the art of performing songs/being beat. He sees a performer whose voice is pure truth “naked” and he is intrigued and asks who could do such a thing. Jesus/woody Guthrie/other hero of Dylan/. Dylan then tries to find his pure true voice/self/life but he struggles. It is “hard” work and he doesn't “understand” how to sing and he has no idea what it will sound like when he gets his sound or “home”

Chorus: B/C something is happening here but you don't know what it is Do you Mister Jones. “Something is happening here” speaks of the world Jesus spoke of namely that of the material world or what we can see or touch. “don't know what it is” speaks to our collective ignorance of god/spirit/consciousness or “what is” also in the bible the god “I am that I am” or alludes to the saying "life is what it is" Mister Jones is metaphor for white middle america. Jones being the most common name in America. White middle america doesn't understand music or culture of beats or black culture.

You raise up your head
And you ask, "Is this where it is?"
And somebody points to you and says
"It's his"
And you say, "What's mine?"
And somebody else says, "Where what is?"
And you say, "Oh my God
Am I here all alone?"
Because something is happening here
But you don't know what it is
Do you, Mister Jones

Dylan raises up his consciousness “head” and asks himself if his sound/soul/essence can be found in his head or thoughts, and a critic tells him “It is his” or somebody else s sound that he is copying and it is not unique. (probably referring to Woody Guthrie') So frustrated Dylan asks “What's mine?” or What is my voice/soul? Then the audience/critics ask “where what is?” They don't even understand the question. And he freaks out. acknowledge that he has a voice and refer him to the spirit or “what is”. He freaks out. “oh my God” maybe I'm all alone asking this question of the meaning of “what is” Don't even have a voice? Am I here onstage and not connecting with the people? “Am I alone?” Am I going to be a failure?

You hand in your ticket
And you go watch the geek
Who immediately walks up to you
When he hears you speak
And says, "How does it feel
To be such a freak?"
And you say, "Impossible"
As he hands you a bone
Because something is happening here
But you don't know what it is
Do you, Mister Jones

Dylan goes to see the geek perform (nor sure who he is referring to) The geek loves Dylan's voice when Dylan “speaks” and walks up to him after Dylan's show and tells him he is going to be a star “freak”. Dylan is incredulous and says “impossible” but the geek throws him “a bone” or gets him gigs.