Lyric discussion by jock110174 

Based on the good info provided so far here, it seems to me that the bad news from home is this guy himself, the one who is speaking the song, narrating this sad tale.

He's bad news because his home is in the U.S., but now he finds himself on a Mexican seaside cliff just down the road from where the cheating lovers lie. He is pausing for a few seconds, to immortalize his story for Randy Newman, before carrying out his homicidal intentions.

The bells and choir might be tolling and wafting from a church in a nearby little Mexican town. Or perhaps,these sounds are revisiting him from his wedding day in that blissful time when his wife lied to him that she loved him.

The night she disappeared, he was worried sick for her. He was awake all night. This thought didn't pass through his mind that night-- but now he knows . . she lied.

Now that he is with her once again, he knows that she can run but she cannot hide.

The illicit pair, as insinuated before, are down the road from this cliff overhanging the sea, and they are asleep on a feather-bed in a rented room of their fugitive-lovers' hacienda.

Because the moon is not gray except when a cloud comes over it, his wife's eyes are gray like the moon because they are closed.

Also, she has lyin' eyes she can't hide.

Her hair is black as the sky at night because there's no light in the room.

The oil on the water, and iron desk, I don't know. Maybe he pushed their car over the cliff and the rainbow signifies there's no hope for any of the three. He is about to walk back.

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