Don Quixote - Tragedy or Farce?

A friend of mine argues, based upon the last chapter of the Man of La Mancha, that it is a sad, pathetic, pitiable tragedy. Don Quixote calls for a confessor, and repents of his foolishness, and makes his peace with God, just in time to die.
I am wondering if perhaps Cervantes meant this as a little joke. After all, he went with Don Juan of Austria to fight the Last Crusade at Lepanto, and he lost his arm. He wrote his novel while living in cramped quarters with more than several women (related, plus wife), and was penniless upon his deathbed (if memory serves).
Cervantes seems to me to have been a man of eminent humor, pithy insight, and jocund spirit. I do not think he was satirizing either his hero or mankind. The joke, rather, was upon the Spain of his day. Perhaps he was disgusted with it. After all, they were busy planning the invasion of England rather than opposing the encroaching Turk.
In any case, I would rather have the complete volume of Don Quixote with me upon a deserted island than all the works of Shakespeare.
It would be more ho-ho-larious.