The song is "Red Dancing Shoes," written by Peter Ostroushko. It has been recorded by the Middle Spunk Creek Boys on "No One Else"; by Robin and Linda Williams (with Peter Ostroushko) on "Dixie Highway Sign"; and by Peter Ostroushko on "Down the Streets of My Old Neighborhood" (the same album that has the fine song "B-O-R-S-C-H-T").

Sorry, I couldn't find any sound samples or lyrics.

I believe there are archived programs of "A Prairie Home Companion" available somewhere on the net; and I'd bet "Red Dancing Shoes" is in there somewhere.