Lyric discussion by PaulSouth 

Cover art for I'm Set Free lyrics by Velvet Underground, The

Without a doubt this is a spiritual song, from the title to the music itself, and lines such as "let me tell you people/what I found" - the archetypal Mohammed descending from the mountain with the word.

"I've been set free and/I've been bound" is probably about the feeling of being released from a relationship, and yet still being bound to the person. This, as a spiritual principle, is called "non-duality," where two opposites coesisit at the same time. In this case, bondage and freedom exist simultaneously.