Active Offerings & Did Luther forget about Augustine's discussion of free will?

I have spent a great deal of time this week and last trying to understand Luther, his ideas and the events surrounding his break with the Church. It has been frustrating, but I feel like I'm getting closer. So here are some of my ideas about Luther, his Reformation and some modern implications.

I have been surprised to discover that Luther had some valid and insightful points. Obviously the Church at that time (and still today) was in need of a major overhaul. I like the fact that he wanted to focus on developing a personal relationship with God. I understand some of his (early as in before his excommunication) ideas regarding salvation. And some of those ideas match what I have been taught in catechism (Catholic catechism) and what I have personally come to believe on my own. I don't think we have the power to save ourselves. I agree that it is only through the grace, love and divine mercy of Christ that we can be cleansed of our sins. However, unlike Luther, I think that just as we have to develop a relationship with God, we need to work with God to achieve salvation. I think that it is interesting that Luther kind of ignored this point, especially since he spent a great deal of time talking about being one with Christ (bride/bridegroom thing) and sharing in his priesthood and defeat over death. I also think it is funny that even before he developed the idea of predestination that he did not even touch upon the concept of free will in his writings. As an Augustinian who greatly admired St. Augustine, it seems to me at least to be a rather large oversight. St. Augustine's revelation about free will is the key to developing a relationship with God. It is the bridge between works and faith that Luther was missing. Because we have free will, we have to work with God in order to be saved, but being saved does require conscious choice on our part. Faith is not a one shot sort of deal. Each moment we are faced with the decision to uphold our faith and act in accordance with it or to ignore it or deny it and act contrary to it. Our actions can be that declaration of faith, a way to reinforce and strengthen faith. Also actions/works can open us to God. It can be a gesture that allows us to grow closer to God. I agree that hypocritical actions (i.e. self-serving works done without authenticity, devotion or good intentions) do not suffice for salvation or spiritual growth. However, there is something to be said of actions that are an offering. Currently, the Catholic Church still offers indulgences. I think part of the idea behind indulgences is this concept I will call "active offerings." Although a person may not fully understand things enough to have "true faith" or they may want faith but not know how to develop it, they may make small gestures or do actions. Each time they engage in good works, it may bring them just a little closer to God. Each act is almost like a weak, perhaps barely audible invitation to God. Maybe over time that invitation will be extended and the shaky, tentative relationship they developed through their works will grow. I figure that even if you don't have a strong, fully formed idea of faith if you are doing a work you must consider the possibility of salvation and God. That small seed can blossom and grow and perhaps eventually lead to faith. I think that faith is far too a dynamic, living, breathing, changing, evolving belief/action/idea/thing to be so narrowly defined.

This section on Luther has really gotten me thinking and reflecting, so my ideas tend to change minute to minute. I am going to continue to cogitate on this and hopefully I will gain more insights as I think.