We don't know if the young man knew Jesus well, or if it was just the first touch of God on His soul which completely overwhelmed him. But regarding the last, I was comparing him of some of the participants in youth retreats I have attended in the recent years, where some of them would know hardly anything about their faith. The idea of a God loving them and a God who wants to know you personally would be very alien.
Then during the weekend they experience the love of God, and God can touch their soul in a profound way once they open up their heart to Him. Sometime they they later testify that it was an amazing experience. From my own reflection it might seem like everything which looked so important to us suddenly melts and evaporates to nothing compared to this encounter with God, with usual as fruits an experience of joy, love and often a very deep peace.
So is this what this young man experienced, this encounter with Jesus, seeing His face, and realizing that there is so much more to the world that he ever dared to imagine, a infinite depth in of love offered to us.
After Jesus tells him to observe the commandments as given to the Jewish people the young man answered "Teacher, all these I have observed from my youth." (Mar 10:20 RSV). I guess we can for now assume from this that he lived a decent life, that he was a good person, and "and Jesus looking upon him loved him" (Mar 10:21 RSV).
But now comes the more difficult part. Drawing on my example of people having an intimate experience of God at one specific moment we now move towards the question of what happens then. God can often touch us, in varied ways, but what difference does it make to us?
The young man, possibly in the spur of the moment, realizes by some deep encounter that Jesus is special (he calls Him teacher, not Lord, so doesn't necessary understand what is so special about Jesus) and is eager "to get more of it". However, we hear that when Jesus said to him "You lack one thing; go, sell what you have, and give to the poor, and you will have treasure in heaven; and come, follow me." (Mar 10:21 RSV) that "his countenance fell, and he went away sorrowful; for he had great possessions" (Mar 10:22 RSV).
He went away sorrowful... The young man did encounter God, but was not ready to let go of the attachments he had. He was not prepared to give up everything for the sake of following Jesus, and instead left Jesus, being sorrowful, possible back in the state he was before the encounter. I think it is not necessary the fact of having a lot of possessions, for people who have a family obviously need a certain means for providing for them, but the fact that he was attached to them, and not ready to let go, he was not ready to change his way of life in order to draw closer to God
In order to enter into the full relationship with God we need to be able, or to be prepared, to let all go. So this passage maybe invites us to reflect on our commitment to God. Are we ready to follow him? When he invites us and touches us, do we try and make the necessary changes to our way of life to draw deeper into this relation, or are going away sorrowful and leave Jesus standing there on His own, stretching out His hands with the gift of hope, of peace and joy, while walking away and leaving Him?
"Truly, I say to you, there is no one who has left house or brothers or sisters or mother or father or children or lands, for my sake and for the gospel, who will not receive a hundredfold now in this time, houses and brothers and sisters and mothers and children and lands, with persecutions, and in the age to come eternal life." (Mar 10:29-30 RSV)