i agree it's a killer poem.  i really like both the rhythm of the poem too.  the poem can be interpreted in so many different ways.  that's how you can tell how great a poem is, when there is no one simple clear interpretation.  the lay of shallot is totally one of them.

there are a tonne of awesome pre-raphaelite paintings that are entirely based on the lay of shallot poem by alfred tennyson.  there are at least four of them by john williman waterhouse and another by william holman hunt which is also excellent.  you should take a look at them.