Wow - just did a quick google-search, and the words appear to be connected with Donegal, which I hadn't known. Packie was from that area (Ardara) so that lends some weight. For what it's worth, Wiki says:

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My Lagan Love" is a song to a traditional Irish air collected in 1903 in northern Donegal. The English lyrics have been credited to Joseph Campbell (1879–1944, AKA Seosamh MacCathmhaoil and Joseph McCahill, among others).[1]

Campbell was a Belfast man whose grandparents came from the Irish-speaking area of Flurrybridge, South Armagh. He started collecting songs in County Antrim. In 1904 he began a collaboration with composer Herbert Hughes.[2] Together, they collected traditional airs from the remote parts of County Donegal. While on holidays in Donegal, Hughes had learned the air from Proinseas mac Suibhne, who had learned it from his father Seaghan mac Suibhne, who in turn had learned it fifty years previously.[1]

The Lagan referred to in the title most likely pertains to the area of good farming land between Donegal and Derry known in Irish as An Lagán. The Lagan is the river that runs through Belfast. However, some argue that the Lagan in the song refers to a stream that empties into Lough Swilly in County Donegal, not far from where Herbert Hughes collected the song.[3]