Lyric discussion by somerainfell 

From Wikipedia. The last paragraph sheds some light on the song meaning...

In his review for Pitchfork, Dubbin suggests that "'Heimdalsgate' takes up the drugs-as-artistic-inspiration vs. drugs-as-personal-ruin dilemma and plays it out with equally conflicted musical gestures." The interpretation of the song's subject matter as drug-related is not uncommon [2] -- but according to Barnes, neither is it valid. Asked "Are you a stoner?" by The Stranger's Christopher Frizzelle in direct reference to the song's "chemicals", Barnes says, "Yeah, that has nothing to do with drugs. That's the chemicals in your mind." [3]

FRIZZELLE: Serotonin?

BARNES: Yeah. I went through this chemical depression, and that's when I was writing a lot of the songs for Hissing Fauna. They're all songs about that experience. And I was experiencing it in the moment that I was writing the songs, and sort of asking myself: What the hell is going on? Why are you all of a sudden totally paranoid and plagued by these anxieties? And why is everything so distorted and confusing and fucked up? My lifestyle hadn't changed that much. And then I realized, well, there's something going on inside of me that I don't have control over, and then you realize how vulnerable you are to these things, these elements that you can't understand, or unless you go on medication and get it under control. It's like you're being betrayed by your body.

FRIZZELLE: Sometimes if you just put on a dress or something your whole mood can change.

BARNES: To some degree. I'd gotten to that point where nothing was working. I was borderline suicidal, and my relationship with my girlfriend had totally eroded and she'd gone back to Norway with our daughter and everything was totally fucked, and I was just like, What can I do? "The Past Is a Grotesque Animal" is about that. The lyrics tell the story of what was really going on and the music sort of represents this other emotion that I wish existed. The music was really happy because I wanted to make something that would lift my spirits

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