Response: Jesus vs. Church

This post is in response to a friend of mine who posted on the same topic a couple of days ago.

Original: You Like Jesus, but not the Church?

I once heard that Gandhi said "I like your Christ, but not your Christians."

How do Christians respond to this quote?

Here's how not to respond:
1. Get all mad at Gandhi, call him a crazy, eastern, "new age," yoga man, dismiss not only his comment but also his roll in history politically and spiritually, tell everyone this opinion, continue on not being like Christ and not being liked by the majority of non-Christians around you, start a "good old fashioned Gandhi bashing" small group at church.
2. Jump completely on Gandhi's wagon, say "to hell with the church," leave and start a group half Christian (so-to-speak) and half Gandhian that meets on Sunday morning but at a tranquil yoga studio, abandon the word "religious" for the word "spiritual" and give it a definition that serves no purpose other than to make yourself sound smart and "postmodern."
(please note the sarcasm)

But how should we respond? How do we deal with this issue. On one hand Christians are supposed to be like Christ. On the other them not being like Christ is likely why they are Christians. Where's the middle ground, if there is one? The response to this quote is not as simple as it may seem. It is as complicated as discovering how the church as an organism works. The answer may more aptly be put in the form of a question? What is the church? What should it be? What should it look like? How should it function?