There's a cracking interview with Dylan on his website, WT, where he's asked about a party at Frank's house:
"
There is a famous story that you and Springsteen were invited to a dinner party at Sinatra’s house around the time you did that TV tribute to him. Had you met him before? Did you feel like he knew your stuff?
Not really. I think he knew “The Times They Are a-Changin’” and “Blowin’ In the Wind.” I know he liked “Forever Young,” he told me that. He was funny, we were standing out on his patio at night and he said to me, “You and me, pal, we got blue eyes, we’re from up there,” and he pointed to the stars. “These other bums are from down here.” I remember thinking that he might be right."
www.bobdylan.com
That whole interview is worth a read. It isn't a short one, so grab a drink!