Lyric discussion by DMet 

Cover art for Keasbey Nights lyrics by Streetlight Manifesto

Every SM or I guess in this case catch 22 song is metaphorical. But saying that yes the litteral meaning is like the 1st explanation although not neccessarily a gang. He just got himself in trouble and he knows "they" are coming to get him. The metaphorical meaning behind it is more of a way to say that a person can hurt himself without ever meaning to and that society will never help them up. It is implied that this construction of society, to not ever help another unless there is personal benifit, needs to change.