I wonder if the composer(s) of this song could have been inspired by Gilbert and Sullivan. Silly, "topsy-turvey" lyrics and a beautiful melody bring their work to mind. And tho probably a total coincidence, they set Pirates of Penzance in Cornwall. And just to "add to the confusion" as an earlier poster said, isn't cashmere the wool of a goat? So, "the beautiful cashmere lay drooping its head" could represent a capricine element to increase the absurdity of the piece. But wait, there's more! The US Naval Academy's mascot is a goat, and when considered in light of the presented evidence of a Royal Navy origin for the song it might be that "beautiful cashmere" is a reference to American swabs... I'll shut up now.
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