I am very happy to see that we can discuss our differences without getting defensive.
To believe that God gives each of us a free gift of eternal life simply by repenting of sin and believing in him takes alot of faith. God doesn't give us a golden plate of eternal life with our name on it to reassure us of our salvation. The free gift of salvation must be received by faith in order to receive its benefits---eternal life.
Thinking that by doing good works, we can attain eternal life ourselves will doom us to hell.
By faith, Lutherans believe the Gospel when it tells us that in baptism, by the power of the spoken Word of God, our sins are forgiven and washed away as mentioned in Acts 2:38 and in the conversion of Saul/Paul. That takes ALOT of faith. We don't see God come down like the angel at the pool of Bethesda (sp?) and stir the water. We don't hear a loud voice from heaven as happened when Christ was baptized, but since God promises the forgiveness of sins at the time of baptism, we believe it by faith.
The free gift of salvation, the forgiveness of sins, must always be received by faith, in order to receive its benefits.
Anyone who was baptized but never expresses a personal faith in Christ and repents of his sins, will not receive the benefits of the free gift, and may well wake up in hell.
Your explanation above is irrational! There were no circumcision prior to Abraham and it was merely through faith in the gospel that one received remission of sins - Acts 10:43. There was no baptism prior to John.
You have one gospel of remission of sins for one set of people that does not fit for another set of people and the only reason you have such a dichotomy is to fit the unbiblical doctrine of infant baptism. Dying infants are not in any danger of hell as they have nothing to stand before the Lord to be tried for by the principle of "according to their works."