This may be the framework of a potential essay...

Based on what I have read in "The Laughing Jesus," other studies of gnosticism, a video called "The Naked Truth" on googlevideo, "The God Who Wasn't There," and Rook's special show on Jesus Mythicism, I would posit the following:

1. Gnosticism borrowed from many precursor religions. Obviously, there are many parallels between Jesus and other Gods / supernatural mortals who existed before him. Without even citing examples that abound, I think we can agree that the concept of a virgin birth permeated the religions of the ancient world so much that the idea that Jesus' virgin birth was unique and real is simply laughable.

2. Gnostic cults originated on the basis of "Jesus" as the superlative person exemplifying the ideals and principles of their religious beliefs. When reading about early gnosticism, I cannot help drawing many parallels between Buddhism and Gnosticism. This is not to say that the two are related in any way -- but the idea of Buddha as a superlative example of "enlightenment" is similar to the Gnostic creation of Jesus.

Example of similarity: Gnostics believed the creator of the world was the "demiurge". The demiurge was evil because of the level of suffering and physicality in the world, as though he were imprisoning our incorporeal spirits in physical bodies, thereby subjecting us to pain and suffering. The central tenet of Buddhism is that all life is suffering and that non-existence is more desirable than the suffering of existence.

3. Fictional Gnostic texts were created to describe Jesus and the principles they believed in.

4. At some crucial moment in history, that must have been less than a decade, the forefathers of the Gnostic cults died off. The contemporaries of the authors who wrote the Gnostic texts were all dead, leaving only their progeny and other followers. (Based on my reading, many Gnostic cult members were celibate, making progeny difficult.)

5. Since the authors of Gnostic texts and oral legends died, those who carried on the life of the texts and the oral legends mistakenly believed that Jesus was an actual human being. The legends were then passed on as though they were non-fiction.

6. Individuals began to fine-tune and even fabricate new written works based on a non-fictional Jesus.

Now...

Three questions come to mind, and Rook or any other expert may answer:

1. Would early Gnostic cult members have relied more on oral tradition or literature?

I would think paper and written material would be hard to come by and hard to preserve. In addition, it is possible that many followers were even ILLITERATE, and depended on authority figures to dispense interpretation of the literature. It would seem within the realm of possibility and even more advantageous to use oral tradition. Obviously the point here would be oral tradition is prone to serious errors and confusing fact with fiction. Do you think some Danes believed the story of Beowulf was true?

2. Do you think there is a critical moment or period in time when a mythical Jesus became a non-mythical Jesus? If so, when?

3. If Buddha is mythical, then why not Jesus?

Considering that Buddhism and Gnosticism have many similarities, I would compare Buddha to Jesus. Although Siddartha Guatama is considered "Buddha," I believe the -idea- of Buddha took on a whole life of its own, undoubtedly beyond any supposed spiritual attainment of Siddartha. Could not the mythical nature of Jesus have followed the same pattern?

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In any event, I believe that the problem with contemporary sources for Jesus' existence is well documented. My essay would focus more on the actual mechanics of Gnosticism evolving into Literal Christianity (aka Catholicism).