The OP wondered about the phrase "oil of green". A few suggestions were offered as to what it might mean, or what other phrase it might be a mondegreen of. But then there was a long digression into whether that phrase had ever actually been sung, and if so when it had arisen.

Getting back to the original issue:
Thank you, Joe, for the full text of the version concerned. Given the context, and the many substantial differences between that version and more typical versions, it seems to me that "olive green" is the most plausible immediate precursor of "oil of green", though it would be wonderful to have an intermediate version of the whole ballad, on its way to becoming Mrs. Knuckles' version.

Richard