I knew I'd heard the hanging theory before!
Just searched out an old (1964) LP called Scotch and Irish by Robin Hall and Jimmy MacGregor. The sleeve note says
"We use here a combination of the two Irish tunes but there are also several Scottish variants of this fine song. In Sir Walter Scott's "Scottish Minstrelsy" it is described as the farewell song of a murderer on the eve of his execution and contains the final line "I hope you're a' my friends as yet. Goodnight and joy be wi' ye all."

Can anyone access the "Scottish Minstrelsy" to check this out? I can't even listen to the LP to hear what they sing on it, but it does seem that Gerry's suggestion is perhaps not 'completely barmy.'

Sue