For the purposes of DIY MFA, I'm not advocating you all write 20+ page papers so go ahead, breath a sigh of relief. :-) Instead, think about what goes into a "Big Paper" and plan one out. Eventually, you can make use of the material either as a series of posts for your blog or an analytical essay you could submit to a literary magazine. You never know when that material could come in handy. For example, the "Big Paper" I wrote as my literature thesis is in the process of becoming a writing class that I can pitch to various writing programs.
I'm sure you're wondering: what does "Big Paper" actually mean? As I see it, there are two ways you can approach a body of literature: you can do it either thematically or based around one particular author's body of work. In other words, you can do a thematic study of the literature or an author study. In either case, however, the most important element of this paper is the argument, the thing you want to prove about the literature.
Rather than trying to describe how to write a "Big Paper" in one post, I'll be blogging weekly after Commencement with a step-by-step guide to planning and putting together a "Big Paper." Whether you eventually write said paper is up to you (and as I said previously, it doesn't have to be in traditional paper form.) But I think it's important in any sort of MFA program--even DIY MFA--for writers to think broadly about the literature so even if you just outline the paper, it can already give you a lot of insight into the literature and sharpen your analysis skills.
"Big Paper" Step One: Decide if you want to write a thematic study or an author study. For a thematic study, you should choose a minimum of 3 books that share a common theme but are by different authors. For an author study, you should choose a minimum of 3 books by the same author (not in the same series... so no, Harry Potter doesn't count).
For the thematic study: Choose your books and your topic.
For the author study: Choose your author and your books.
That is all. Now go run, read, write, and be smart.