Complex sentence: The song describes a man with ambiguous sexuality who falls in love with a woman whom he imagines he could settle down and marry, but soon discovers the object of his affection is a lesbian, or she thinks he's gay.
Split into simpler sentences: The song describes a man with ambiguous sexuality who falls in love with a woman with whom he imagines he could settle down and be married. But he soon discovers that the object of his affection is a lesbian, and possibly she thinks he's gay.