The poet is using a metaphor. Your answer is correct.
It was used as a secret code among the slaves.
I believe the answer is C. You can brake that sentence into to two sentences and it will flow better.
Hope that helps! :)
He lied to him because he knew that the Cyclops would call his brothers, when blinded, so he said his name was "nobody" so as to have the Cyclops yell out: "Nobody has blinded me". This in turn caused his brothers to not react at all, because they thought that gods had blinded his brother, therefore he is yelling that Nobody blinded him. Let's say then that the third sentence is the only one that can fit the story.
