Should We Always Interpret Scripture Literally?

One way to answer that question would be to ask, did Jesus and the apostles always interpret Scripture literally. To find the answer, let's look at an Old Testament prophecy, the New Testament interpretation of it, and Dr. Robert Stein's comments on it.

"Behold, I will send you Elijah the prophet before the great and awesome day of the Lord comes. And he will turn the hearts of fathers to their children and the hearts of children to their fathers, lest I come and strike the land with a decree of utter destruction.” (Malachi 4:5-6) 

"And as they were coming down the mountain, he charged them to tell no one what they had seen, until the Son of Man had risen from the dead. So they kept the matter to themselves, questioning what this rising from the dead might mean. And they asked him, “Why do the scribes say that first Elijah must come?” And he said to them, “Elijah does come first to restore all things. And how is it written of the Son of Man that he should suffer many things and be treated with contempt? But I tell you that Elijah has come, and they did to him whatever they pleased, as it is written of him.” [To which Matthew adds, "Then the disciples understood that he was speaking to them of John the Baptist." Matt. 17:13]

(Mark 9:9-13 ESV; see also Luke 1:13-18)

“It is evident that Jesus and the New Testament writers often interpreted Old Testament prophecy in a nonliteralistic way. They undersrtood the prophets as using metaphorical and impressionistic language to proclaim their prophetic message. They used the tools of a poet rather than the tools of a photographer to convey their divine message. They understood the ‘literal meaning’ of the prophets as involving what the prophets meant to convey by their words, not what a literalistic interpretation of the words (used figuratively by the biblical author) means. Thus Malachi 4:5 refers to one who would fulfill the role of the prophet Elijah, that is, John the Baptist (see Mark 1:4-6). The dress of John the Baptist indicates that he also saw himself as the fulfillment of the prophecy in Malachi 4:5-6.”
--Robert Stein, Mark, Baker Exegetical Commentary