While I had always assumed this to be a traditional melody, a quick web search reveals no previous versions, so I hereby claim it. However, I note that "There was a little man, and he had a little can" appeared previously in a prohibition-era song called "No More Booze."
How does the little man relate to the train? Is he driving the train? No, qua prohibition-era hobo, he is likely getting a free ride, violating not only the law but his own dignity. And what are his possessions? A can. Perhaps he realizes that "man" and "can" rhyme, and possesses the can just for that reason, making himself an art for the ages' display. The next line gives us a stronger clue: the can was full of worms, which he then puts in a soup. How extreme is man's degradation, to be forced to subsist on worms! Or is this a life choice? Is he living his life as an art, not only through living a rhyme, but in choosing worms, the replenishers of all life, which by eating corpses and transforming them to arable land themselves symbolize nature's triumph over death. Is the man, in fact, dining upon his own death?
But the song offers more surprises, as the first of two "punch lines" springs forth (and think of the symbolism even in the term "punch line," with its recognition of the essential violence involved in humor): it is not the man, but a chicken who ate the worms all up. Surely the man himself is not here being referred to as "the chicken," that brave soul who would dare to defy society and eat his death, but this an actual chicken, a new and surprising player in our drama, whom the man could then eat, thus expanding the cycle of life to not only eat the eater of death (the worm) but to eat the eater of the eater of death. This master stroke would certainly put the song in the far reaches of greatness, but that is not all. As an ad lib, our prodigy songmeister gives us an extra treat, denying the reality of the whole scenario to say that the chicken does not in fact eat up all the worms but instead "he" (more on this choice of word in a moment) went "boop boop boodily oop."
With this phrase, we see that all that is truly important transcends traditional language, that the only way to react in the face of madness is with seeming madness, with a defiant acknowledgement of the absurd. This interpretation is confirmed by the singer's assessment of the song at the end of this recording, which can be clearly understood even though I did not at that time know the word "sucky," nor had that word even been invented in its current use as of 1975. We create, and once the creation is out there, we denounce, we destroy. Such is the only sensible reaction to our own finitude.
Lastly, who is the "he" that emits such a liturgy, that throws the comic itself upon a canvas for our contemplation? Is it the man? Is it the chicken? Is it the chicken witnessing the man witnessing the worm witnessing creation? No, my friends. It is you, it is me, it is the eternal witness, whether you call it God or Brahman or Shmoomo. It is your neighbor and your neighbor's neighbor and your neighbor's neighbor's cat, calling you out in your freakish ineptitude towards this thing called life, pulling the absurd before you for you to sniff and sniff and sniff until you need to scream or cry or wet yourself. Boop boop boodily oop indeed, my friends, for here comes the god-forsaken funny train that seals our fate!