Here is a poem that was written after the poet saw Picasso's "Old Guitarist":

The Man With the Blue Guitar
Wallace Stevens

The man bent over his guitar,
A shearsman of sorts. The day was green.

They said, “You have a blue guitar,
You do not play things as they are.”

The man replied, “Things as they are
Are changed upon the blue guitar.”

And they said to him, “But play, you must,
A tune beyond us, yet ourselves,

A tune upon the blue guitar,
Of things exactly as they are.”

I cannot bring a world quite round,
Although I patch it as I can.

I sing a hero’s head, large eye
And bearded bronze, but not a man,

Although I patch him as I can
And reach through him almost to man.

If a serenade almost to man
Is to miss, by that, things as they are,

Say that it is the serenade
Of a man that plays a blue guitar.

A tune beyond us as we are,
Yet nothing changed by the blue guitar;

Ourselves in tune as if in space,
Yet nothing changed, except the place

Of things as they are and only the place
As you play them on the blue guitar,

Placed, so, beyond the compass of change,
Perceived in a final atmosphere;

For a moment final, in the way
The thinking of art seems final when

The thinking of god is smoky dew.
The tune is space. The blue guitar

Becomes the place of things as they are,
A composing of senses of the guitar.

Tom-tom c'est moi. The blue guitar
And I are one. The orchestra

Fills the high hall with shuffling men
High as the hall. The whirling noise

Of a multitude dwindles, all said,
To his breath that lies awake at night.

I know that timid breathing. Where
Do I begin and end? And where,

As I strum the thing, do I pick up
That which momentarily declares

Itself not to be I and yet
Must be. It could be nothing else.

If you go to the site http://en.wikipedia.org/wiki/The_Old_Guitarist
you will read all about this painting which was painted in 1903, just after the suicide death of Picasso's close friend, Casagemas. This picture is among Picasso' blue paintings, the rather melancholy works that he produced between 1901-4 depicting the outcasts of society. . He painted them in a blue palette to express his sad mood (not as some people think because he couldn't afford to buy other colors).
The figure is thought to be modeled after Senor Sebastian Mazzarella, the blind artist who taught Picasso when he first came to Madrid. the distortions of the figure with its skull face is reminiscent of the works of El Greco.
I don't think the work has any meaning beyond what I have suggested above
Also read: http://www.mystudios.com/art/modern/picasso/picasso-old-guitarist.html