Can interpretation be separated from application?

I had a lively conversation around this question with a couple colleagues some years ago. I insisted yes, identifying what a text meant in the first century is different from asking what it means today--although of course the two should be related. (I have already registered my disagreement with the idea that application involves extracting timeless principles from the text here.)

My colleagues replied: No. Go read Gadamer.

I have finally begun taking their advice. Fortunately for me, Gadamer addresses the question early on:

The hermeneutic problem is universal and prior to every kind of interest in history because it is concerned with what is always fundamental to 'historical questions.' And what is historical research without historical questions? In the language that I use, justified by investigation into semantic history, this means: application is an element of understanding itself. If, in this connection, I put the legal historian and the practicing lawyer on the same level, I do not deny that the former has exclusively a 'contemplative,' and the other an exclusively practical, task. Yet application is involved in the activities of both. How could the legal meaning of a law be different for either? It is true that the judge, for example, has the practical task of passing judgment, and this may involve many considerations of legal politics that the legal historian (looking at the same law) does not consider. But does that make their legal understanding of the law any different? The judge's decision, which has a practical effect on life, aims at being a correct and never an arbitrary application of the law; hence it must rely on a 'correct' interpretation, which necessarily includes the mediation between history and the present in the act of understanding itself.

Of course, the legal historian will also have to evaluate a correctly understood law 'historically' as well, and this always means he must assess its historical importance; since he will always be guided by his own historical pre-opinions and pre-judgments, he may assess it 'wrongly.' This means that again there is mediation between the past and the present: that is, application.

From the forward to the second (German) edition of Hans-Georg Gadamer, Truth and Method (2nd rev. English ed.; London: Continuum), xxix.

For Gadamer interpretation and application are part of the same process because, I take it, our preunderstanding about the present always already shapes our interpretation of the past. I'm good with that.

But implicit in Gadamer's illustration is the fact that the process of working out a contemporary application can and, in some sense, should be separated from the process of working out a historical interpretation. The two processes deal with different contexts.

Perhaps the difference is that Gadamer wrote to counteract an over-emphasis on historical distance while my beginning students tend to approach the text without any sense of historical distance at all: I hear students talking about Jesus' criticisms of the church or notice them assuming that Paul wrote 1 Corinthians directly to them--that sort of thing. I find that getting my students to disintinguish what it meant from what it means helps them read the text more carefully. Jumping too quickly to Gadamer--or this aspect of Gadamer's thinking--may actually reinforce sloppy reading practices.