Lord Shiva's eyes are half-closed they view the outer world with inner wisdom. Closed eyes would represent one wholly introverted and oblivious to the world. Fully open eyes would signify total extrovertedness.
The symbolism of Shiva's half-closed eyes, however, indicate that He is fully conscious of the within and the without. He understands the world outside to be only a reflection of the Self within. With this intuitive experience, His actions sing the song of the Self in all transactions in the world.
A realised person is one who has conquered the ego and kept it under perfect control. In contrast to such a one, worldly persons are victimized by the demands ofthe ego. In such people, the ego gains the upper hand, and they become subservient to its whims and fancies. The glory of a"man of perfection" is, therefore, in transcending the ego. Tills transcendence is symbolised by Lord Shiva coiling a serpent around his neck as a decoration for His body. The serpent represents or symbolises the ego. It is used for adorning His personality instead of destroying Him.
Lord Shiva is said to have a third eye called the jnana caksu (eye of wisdom). With the help of this eye, Shiva gains an intuitive vision of the Truth, which is denied to the two eyes of an ordinary mortal. This idea of the third eye is not to be taken literally to mean that a third fleshly organ exists. The intuitive wisdom of Truth is born with perfect integration of the mind and the intellect, that is, when devotion for the Lord blends with subtle contemplation upon the transcendental Truth. Devotion and contemplation are the two limbs which take one to the abode of Truth.
When these two combine - that is, when, with an attitude of devotion, a seeker uses intellectual discrimination to penetrate the mysteries of the Truth - a subjective apprehension - experience of the Reality arises in the seeker's bosom. This is symbolised by the opening ofthe third eye of wisdom.
To be continued
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Swami Chinmayananda talks about the symbolism of Lord Shiva in depth. It is an interesting read about Shiva in Hinduism, one among the important Hindu Gods.