The Law is not the Gospel

A respected friend through the Internet wrote the following during his reply to a Lutheran critique of Calvinism (my question follows and then some additional thoughts):

"Calvinistic Churches understand for the reprobate all Gospel is heard as Law and for the Elect all law is heard as Gospel."

Maybe you could explain in what sense all law is heard as Gospel for the Elect? I would have to disagree with this statement as it stands. This is something Steve Schlissel or Doug Wilson would say, but are you sure you would as well? Do you hold to there being Law as a principle of works antithetical to the principle of faith?

The actual Mosaic covenant, the Mosaic laws themselves (not talking about the entire Mosaic economy which included the sacrificial system, etc.) was a ministration of death (this is how Paul reckons it even as he is writing to the elect). They revealed the perfect holiness of God and his righteous demands and so for sinners it's like kryptonite; "the soul that sins shall surely die". The very existence of a sacrifical system (which I would argue is not part of the Mosaic covenant itself but came with the Mosaic covenant as a reminder of the abiding foundation of the Abrahamic covenant of grace) proves there was within the Mosaic laws a principle of works wherein life is promised for obedience and death is threatened for disobedience. The Law says when there is transgression, there must be punishment, there must be death. The new covenant is characterized by the forgiveness of sins - through an atonement which only makes sense because of what the Law was tutoring. The Law is subservient to the Gospel, but it is not itself Gospel.