Hmm ~ I'm surprised to find a discussion of this song to which I haven't already added my two-cents-worth. Especially since some of it was written during the immediate post-Katrina period, when I was spending a lot of time on the computer and specifically at Mudcat, while in "exile" (also known as "evacu-cation") How'd I miss this one?
This most certainly *IS* an Irish song, once you realize that the narrator is (in all likelihood) an Irish immigrant to New Orleans who was recruited to labor in the construction of the New Basin Canal, which ran from the shore of Lake Pontchartrain south to center of town, just a few blocks from the Mississippi River waterfront.
New Orleans was the number-one US destination for Irish immigrants during the first wave of famines (1840s-ish), thanks to this gigantic construction project. Unfortunately, so many immigrant laborers on the project died of Yellow Fever that an Irishman's statistical chances of survival were actually better back home (even in the sorely affected rural west) than as an immigrant to Louisiana.
Word of the catastrophic death toll made its way back to Ireland, and significant numbers or Irish immigrants never came to New Orleans again; all the immigration afterwards would be concentrated in the ports of the northeastern US. New arrivals would either stay in the Boston/NYC/Philly area or hop on trains to Chicago and points west.
The fact that the usual tune to which "Lakes of Pontchartrain" is sung is recognizably Irish supports the theory that its lyric comes from the Irish-immigrant experience of this part of the world. The geographical error(s), including the use of the plural for Lake Pontchartrain, are understandable as a stranger's inexact understanding of the harsh environment into which he was suddenly thrust.
Check out Paul Brady's website for some excellent tablature of his arrangement of this song. It's one of only two numbers posted there. (The other is "Arthur McBride.")
Incidentally, I have heard this lyric sung to at least one entirely different melody by bluegrass groups.