Jim Lad - I agree that the "shell shock" aspect is unnecssary and unsupported by the text of the song itself. What we need to know is that he still wears wooden shoes, and thinks he's still in Rotterdam. How he got that way is probably unknowable, from within the text anyway.

Joe - that's pretty much what I meant by "unless you want to count "life" as the greatest backstory of all." - But I think you're reading more into "making stuff up" than is necessarily there. All it means is "the details of the piece are not tied to specific people, events, or facts." And I don't really think there's significant contact with an afflicted person necessary - the level of detail about The Dutchman's delusion isn't all that demanding. Smith makes us know what's going on with him with just a few brushstrokes; he's letting his dreams leak out, after all, and what more do we need to know? It's Margaret who's the Mona Lisa figure in the song, for my money.

Stpehen L Rich - I agree, the lyric "works" for any number of interpretations, including that Margaret is wife/daughter/sister. That's part of its brilliance and power.