In my experience with melancholia I've seen patients who self-revile about being incompetent and unable to work well (phallic), who are more generally hated by others and should be scorned (anal), and then are abase themselves for being wretched and wrong without reference to the social body or social activities.
I've also toyed with the idea that this is a subject altruist defense and that there is melancholia in body dysmorphic disorder and other instances of the object egoist hating her body or appearance.
Besides these melancholic reactions I think that there is just depression as emptiness, coldness, and loss of the sense of beauty in participating in, being an insider in, the group. It goes along with the sense of having sinned or done something wrong that one is being punished for. This might attach to actual wrongs or bad things one has done but I've also had the experience of having a couple patients confess a sin that they had been obsessing about and there was no change in the next few weeks of their depression. To my mind it's still valuable that they opened up in this way but I had the sense that the feeling of having done something wrong came first and the sins were brought about secondarily to rationalize the pre-existing feeling. But, this was just a feeling.
I think that the song is bad. In fact, I've never been much of a fan of Tom Waits. I don't Wanna Grow Up and Downtown Train and a few of his "hit songs" were pleasing to me but never quite enough to make me rifle through his albums searching for more.
Anyway, the song works with cliche as far as the altruistic aspect goes, but what I thought was more revealing was the house being old, "cracked and peeled" and generally expressing the author's feelings of object egoistic melancholia.
In previous posts I've shown that the house was a volar deutero castration complex. The phallic mother is the central figure and her possession of the beautiful home is her possession of the father. The ugly home in this song is the loss of the beautiful home. However, the father imago can't be totally denigrated without foreclosure or psychotic consequences. It must be defended against in paranoia or melancholia or something that keeps it there to protect against the return to the mother.
So, I think that ugly and run down home that is contrasted with a "palace" is a comment on how the author of the song feels about himself.
"House Where Nobody Lives"