Guest, Married to a Welsh woman: "taffy was a Welsh man taffy was a theif.. taffy came to my house to steal a leg of beef I went to taffys house taffy was upstairs so I cought him by the left leg and threw him down the stairs...
playground verse early 1960s South Wales.."
As I recall it, "Taffy was a Welsh man, Taffy was a thief. Taffy came to my house and stole a lump of beef. I went to Taffy's house, Taffy was in bed. So I picked up a chopper, and chopped of his head."
Your last two lines seem to have crept in from "Goosey Goosey Gander".
The version I recall shows the over-the-top reaction of the English, who considered sheep stealing an offence worthy of the death penalty.