Lyric discussion by Evenstar1 

Cover art for Grey Gardens lyrics by Rufus Wainwright

"Tadzio" refers to Tadzio Smith. He was my ex-boyfriend's voice coach at college in Ohio. He knew Rufus through friends and hung out with him at a party and Rufus hit on Tadzio, who did reciprocate it since he is straight. There ya go.

This is correct. Tadzio Smith and Rufus are friends (I know them both) and apparently this song was written in Montreal after the two of them watched the movie Grey Gardens. Of course it also has the double meaning of being the young Polish boy's name in Death in Venice.