I think it may be more than just nonsense. Those syllables remind me of the beginning of "The Great Silkie", where "an earthly norris (nursing mother) sits and sings; and aye she sings BY LILY WEAN" (this is the DT version). Maddy Prior, in the notes from her Ravenchild CD, gives it as BA LILY WAIN. And the other song in the DT, "The Grey Silkie of Sule Skerry", has the words BALOO MY BABE.

So this appears to be representative of the sound of a mother cooing to her baby. Of course there's no mention of a baby in "The Outlandish Knight", but still...

Cheers,
Michael