Duncan Richter has a post about Wittgenstein and Kafka. In the comments to that post, there are recommendations of some additional work that involves Kafka and Wittgenstein. Richter refers to Rebecca Schuman's paper, ‘"Unerschütterlich": Kafka’s Proceß, Wittgenstein’s Tractatus, and the Law of Logic', which has now appeared in The German Quarterly. I know of one fictional work that puts Kafka and Wittgenstein together (very briefly). It's a story by Guy Davenport called The Aeroplanes at Brescia.
Last fall, Ben Ware published 'Ethics and the Literary in Wittgenstein's Tractatus Logico-Philosophicus' in the Journal for the History of Ideas. Ware there 'explores the connections between the literary and the ethical in the book,' and argues that 'Wittgenstein hoped to achieve a practical rather than cognitive transformation in his readers' lives.'
On another German lit front that involves Wittgenstein, Gwyneth Cliver's 2008 dissertation, Musil, Broch, and the mathematics of modernism, has two chapters on Wittgenstein.