Here is what Walther said about Lutherans being 'kathlic'. You can check the full article here.
Now perhaps others will say: "So you don't want that! Fine, then call yourselves Catholic. But to this suggestion we say: God forbid! Indeed the laughable accusation is often made against Lutherans that they are very much like the Catholics. but who was it that first in public writings truly attacked the Roman papacy as the chair of the antichrist. revealed it to all the world, mortally wounded and killed it? Was it Zwingli? Was it Calvin? Was it Wesley? Wasn't it our Luther? Did not all other true and supposed reformers continue the attack on the enemy from within the fortress which Luther had taken in the heat of battle? How could Lutherans call themselves "Catholic" when the archenemy of the Lutheran church calls himself by this name so that with this beautiful name he might hold captive the consciences of the souls freed by Christ? For indeed the name "Catholic" is a glorious name for it means the universal Christian church which was established by the apostles and spread out upon all the earth outside of which there is no salvation. Obviously no one can be a Christian who would not confess himself as belonging to the church which is catholic or universal in the truth. And there was a time when the true church used this name and with this name separated herself from all false doctrines and their sects. And it has a glorious sound. How wonderful the name catholic sounds. For example, in the mouth of Athenasius or Augustine when they use it against the sects of the Arian, the Donatists and others. How glorious the name rings in the time of the Roman bishop Gregory the Great who completely rejected the title of the universal bishop of Christianity. Gregory wrote to Eulogius, bishop of Alexandria among other things: "You allowed a haughty designation in the title
of your letter in that you grant me the title of the universal pope. I ask that hence forth you do no such thing." (L. VIII. ep. 30). In another place this Roman bishop (who died in 604 AD) wrote that until his time no Roman bishops had been willing to carry this title for fear that the true faith would be lost and a bishop would become the forerunner of the antichrist. While the bishops of Rome still wrote in this manner and were appalled that by accepting the title of universal bishop over all Christianity Christ, who is the true head of the entire church, would be robbed of his honor - at that time there was still a true church which called itself the catholic or universal church. But what is the meaning of the word "Catholic Church" now? It is the fellowship of those who recognize the bishop of Rome as the head of the church, as standing in the place of Christ and God himself. They recognize him as infallible and give his commands unconditional obedience. They must therefore worship all the unquestionable errors of the papacy such as: the sacrifice of the Mass, praying to the saints, purgatory, the worship of images and relics, the pope's indulgence, human works unto salvation and self chosen works, the forbidding of the bible and marriage, tradition or the unwritten Word of God, compulsory fasts etc. etc. which all the confessions and catechisms of the new Roman Catholic Church teach along with the explicit explanation that outside of this faith no one can be saved. (Prof. fid. cath. e Conc. Trid. a S.P. Pio IV extracta, No. 28) Since from this it is now clear that the name "Catholic" has a new meaning, namely the Roman papacy with all its atrocities and in no way the universal Christian Church, and thus indicates a sect, obviously no one who recognizes the Word of God as the true rule of the Christian faith can trouble us to use this name.
This is one of Walther's best comments. I have his Law and Gospel book and I find very little success in testing my scepticism on what he wrote there. My skepticism often goes home, licked. I am sure I will find something I can disagree with, I have one but this is not one of them.
Here is my observation. Poping groups will first stress that you are a small c "catholic". Since they have the sophistic mentality already in place, it won't be long until the small c gets played up in the discussion and with a slight of word usage, you are now no longer talking about being small c "catholic", you are now transitioned to the big C, "Catholic". If that word is so precious to you and you idolized that word such that you must have it, well, I can only say, you are on your way to home sweet Rome.
I like what Pr. Mark said to me (one of our LCA pastors) on this blog and what Pr. Brett (my pastor) said in discussion: one day, they may even deny us the name Lutheran, and we would not even be shocked or awed or sorry for it. Why? Because we are not into a name, we are into the Gospel, it does not matter what they call or do not call us. When people are into JBFA i.e. the Gospel, they do not quibble about their labels, they are just convenient terms for quick positional identification and location.
It is not the name that counts but the meaning of what is behind it. That is the question.