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We'll play this similar to the Emmy Lou version below. This is a fantastic song with easy chords. You can play in the same key as the Emmy Lou video in GCEA tuning! Try throwing in some SUS4 chords in the [C] and [G]s for interest. The lyrics are a mixture of Van Zandt and Emmy Lou versions particularly in the choruses.
A music video for the song "Pancho and Lefty", was released in 1983, depicting Willie Nelson as Pancho, and Merle Haggard as Lefty. Townes Van Zandt also appears in a supporting role. Members of the Western Writers of America chose it as the 17th greatest Western song of all time.A video for this song: