Step 1: Recall the nerve anatomy. The oculomotor nerve (third cranial nerve) supplies most extraocular muscles, raises the eyelid, and also carries parasympathetic fibres that drive pupillary constriction and accommodation.
Step 2: Understand pupil-sparing palsy. The parasympathetic pupillary fibres run on the outer surface of the nerve and get their blood supply from the surface vessels. In diabetes, the damage is ischaemic and affects the inner core of the nerve while sparing these peripheral pupillary fibres.
Step 3: Apply to the earliest sign. Because the pupillary fibres are spared early, the light reflex remains normal at the onset of a diabetic third-nerve palsy. Patients older than 50 with diabetes typically develop this pupil-sparing oculomotor palsy.
Step 4: Why the distractors are wrong. An abnormal light reflex would point to a compressive cause such as an aneurysm, not the ischaemic diabetic palsy, so the options describing abnormal reflexes are incorrect.