I suspect the third line of Verse 1 should read "round his leg was a ring and chain".
What's driving me mad is that I KNOW I read an explanation of the the third verse - I think prisoners transported for a fixed term were brought back early for waht passed for rehabilitation - but I'm damned if I can remember where.
I think Nic's was the only version I've ever heard. My guess is that he found in a book and fitted a tune to it.

Regards