Step 1: The oculomotor (third cranial) nerve carries both somatic motor fibres to the extraocular muscles and levator palpebrae, and parasympathetic fibres for pupillary constriction and accommodation. Step 2: The pupillomotor parasympathetic fibres run on the outer surface of the nerve and get their blood supply from the surrounding pial vessels. In diabetic (ischaemic, microvascular) third nerve palsy, the core of the nerve is infarcted while the peripherally placed pupillary fibres are spared. Step 3: Because of this pupil-sparing pattern, the light reflex stays normal early on, even though there is ptosis and limited eye movement. Step 4: Therefore the earliest finding is a normal light reflex (pupil sparing), making option a correct. An abnormal light reflex would instead suggest a compressive lesion such as a posterior communicating artery aneurysm.