Dylan quotes are bolded
So far we have seen Stephen's street ramblings change from a light, willful participation in a fantasy world (Blackrock) to a seemingly addictive, distorted, alien world (Dublin). The change can be "diagnosed" in part by more "tangible" causes--the lower social class, the increased sexual frustration, religious anxiety, etc. There may also be a more abstract element of "coming of age" that cannot be explained by events that effects the drastic difference in tone we see between the different ramblings.
The Blackrock fantasy was much more grounded in the Count of Monte Cristo. It was much less confusing, very sunny, etc.
There would come to his mind the bright picture of Marseille, of sunny trellises, and of Mercedes
The difference between the two is best shown in this passage: He returned to his wanderings. The veiled autumnal evenings led him from street to street as they had led him years before along the quiet avenues of Blackrock. But no vision of trim front gardens or of kindly lights in the windows poured a tender influence upon him now.
The appeal of a Mercedes comes from Stephens desire for an intimate relationship, and his inability to go about getting one (the tram scene is an example). He describes his Mercedes fantasy in the following passage...
He did not know where to seek it or how, but a premonition which led him on told him that this image would, without any overt act of his, encounter him. They would meet quietly as if they had known each other and had made their tryst, perhaps at one of the gates or in some more secret place. They would be alone, surrounded by darkness and silence: and in that moment of supreme tenderness he would be transfigured. He would fade into something impalpable under her eyes and then in a moment he would be transfigured. Weakness and timidity and inexperience would fall from him in that magic moment.
I'll start with some Dylan lines.
By day and by night he moved among distorted images of the outer world. A figure that had seemed to him by day demure and innocent came towards him by night through the winding darkness of sleep, her face transfigured by a lecherous cunning, her eyes bright with brutish joy.
These are all images of someone who doesn't know what else to do than look for a simple twist of fate--his Mercedes to step out of the shadow... or to "pick him out again".
There are a lot more more parallels you could draw. The first passage in "Simple Twist of Fate" for example seems to fit Stephen's Tram Ride experience. Also the "she" in the song is widely considered to be a prostitute. Also the line "People tell me it’s a sin, to know and feel too much within" reminds me a lot of Stephen's religious anxiety.
In any case, I highly recommend giving Dylan's song a listen to get the full impact... the whole song sounds like a theme-track to Stephen's street ramblings.