Lyric discussion by XianSnake 

This song is about his cousin and it's a eulogy about how his suicide left Conor in sadness at first. But it ultimately changed him for the better.

The interesting part, to me, is when the music abrubtly quiets and Conor sings "And I never thought this life was possible, you're the yellow brid that I've been waiting for." To me this symbolizes a turning point in his mind where he realized the reality of the effect suicide has on the people left behind. In this, Conor comes to recognize that he is somewhat "better" in the sense that he can better understand his depression and he can better understand why he should not want to kill himself.
Right now, at this point in time, he is "drunk as hell on a piano bench," and "the sound of loneliness" makes him happier. This means that he is attracted to "the sound of loneliness," or the sadness that people have expressed in art from feeling lonesome. Because he is on the other side (he's not so lonely anymore), he can better appreciate the emotion of sadness, even feeling a love of it, where just hearing it can make him happy.
While depressed, he never thought that a life with a mind that has love for life was actually possible. When he hears or sees or feels sadness in art in the world, it makes it happy because his yellow bird (see Simon Joyner), who came to him in the tragedy of a friend's suicide, made him realize that he is happier than the art he hears, so by comparison, he is grateful for that. This is why he says "it all gets reversed." When he was depressed, he didn't love the sadness in art, because it actually just made him think worse of living. Now that he's happier, the sadness/loneliness is a beautiful thing that he has grown to love and feel for, so it makes him happier, or as I would put it, more peaceful in his mind. This song is put after "Landlocked Blues" on "I'm Wide Awake, It's Morning" because IMO "Landlocked Blues" ends with the resolution that only way out is death, but "Poison Oak" ends with a realization that the impossible has come true, that living, and being okay with that, is not only possible, but real.

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