GUEST's "Pancho and Lefty as the same person" idea is very interesting. If you look at the song in that way, a lot of the confusing aspects make sense. That dust-biting line for one. Also, the mystery of where Lefty got the bread to go. And "And all the federales say they could have had him any day" - which "him?" There is not ONE reference to the relationship between the two - it's all implied very vaguely. When not naming names, van Zandt seems to be talking to/about one person - see first verse in particular. Maybe Lefty just got too old to continue the outlaw life as Pancho...