I don't know if this is what it's asking for, but here's what I've got.

The line "Then felt I like some watcher of the skies" indicates the level of immersion which the speaker felt upon hearing Chapman tell his interpretation of Homer's work. Comparing his feeling to that of a "watcher of the skies" is the speaker's own way of expressing the things he experienced within his mind as the story was told. He felt separated from, yet still present in, the events taking place in the story, like some bird or even a spectral entity, watching everything unfold from above. This is opposed to the typical, more mundane experience that one undergoes when reading. Keats would probably liken such a feeling to recalling vague memories or simply hearing the events being told by someone who was there, rather than being there for oneself to witness everything as it occurs. Essentially, he is saying that, while other translations get their points across and explain the story's occurances just fine, Chapman has been able to do that while simultaneously incorporating literary devices and other elements to give the story more vivid and realistic imagery.