The song begins with the speaker talking about wanting a fresh start; he wants to leave this "old town" in search of something new. His mind has given him "warning signs" to "leave this city" for reasons explained later in the next stanza. The city has left him drained, therefore once he leaves - if ever - he will "book himself into a soul asylum" or a place where he can shelter his spirit that may have been broken from staying in the "old town" for so long.
In the second stanza, "scratching around the same old hole" indicates he still has not been able to get out of the dump yet. His body may feel young, but his mind feels old because the years have gone by without being able to reach somewhere beyond the confines of his town. His spirit and youthful spark seem to be "half the world away" to him. The subject of the song could be a soul mate whom the speaker has not yet met, but still imagines is out there somewhere. But the hopes of meeting a soul mate do no good as long as they are stuck in the "old town." They are half the world away, and until the speaker passes the borders of his city, that is how far they will stay.
Colleen - Dallas, TX