I think that the song is about an alcoholic who drinks to escape the regrets he has about leading the inauthentic life he is leading. The chain that rattles is from his family (ball and chain) and his desire for drink (chill that's on his bone - clearly an addict). But, I don't think he is actually meeting some old flame in a bar. Too many indicators point to him standing alone in a bar full of men who are drinking for their own reasons in order to slack their pain. He stands in a corner and doesn't even look up in the bar mirror to see behind him, like a lonely and sad man who is nursing his drink.
The women he meets is the memory of his old flame and real love of his life and I believe she exists solely in his mind and she becomes more verbose and her words sadder as he drinks.
I don't think he commits suicide - he just stumbles on the threshold of the bar as he leaves - an ancient omen of misfortune and misery.
The best version is John Denver's from either his album or the BBC special. Check it out on YouTube and let me know what you think.