From an interview with Dylan....
Q: How did you feel when you first heard Jimi Hendrix's version of "All Along the Watchtower"?
A: It overwhelmed me, really. He had such talent, he could find things inside a song and vigorously develop them. He found things that other people wouldn't think of finding in there. He probably improved upon it by the spaces he was using. I took license with the song from his version, actually, and continue to do it to this day.
http://www.interferenza.net/bcs/interw/florida.htm
