Stanza 3 Summary

Get out the microscope, because we’re going through this poem line-by-line.

Oh, no no no, it was too cold always

Someone hears, anyway, and disagrees strongly. But disagrees with what? "They" already suggested it was too cold.
"Always" seems to be the difference. This voice suggests the coldness wasn't a one-time thing but a constant condition. Of course the poor guy drowned. It was only a matter of time.
How long was he in the water, anyway?
One more thing: the tone of these lines is quite the change. The repetition of no suggests conviction and belief. Whoever's talking here knows what's up, unlike the "they" from line 7, who was spouting off possibilities without really knowing anything at all.

(Still the dead one lay moaning)

Here's a slightly reworked echo of line 2, suggesting that the speaker of line 9 was the dead man again.So he's the one who objected that it was always too cold. Notice he remains still—again, continuing not to move. (His remains still remain still, you could say, but you probably shouldn't.)
But who's the speaker of this line? It sounds like the speaker of lines 1-2 (and probably 8) returning for a brief cameo. Apparently this speaker, the one who presents all the other voices, doesn't do much more than set the scene.
There's that word "moaning" again. Does it sound as judgmental this time around?
Notice that this line is in parentheses, as if it were an afterthought or an interruption. The speaker of this line tries to get out of the way, but still needs to show us that the rest of the stanza is the dead man speaking again. Think of it as a little heads up.
So he, the dead man, is the one responding to the idle chatterers in the previous stanza, disagreeing with their ideas about how he died. Do they hear?

I was much too far out all my life

This is another echo, this time of line 3. Why does the poor guy have to repeat himself? Oh, right, line 1 told us nobody hears him.
There's also another difference this time: he insists he was always too far out, for his entire life, even. He's building line 9 to give us a picture of himself as always exposed to cold and always too far from help.
Plus, his skin must have been getting really pruney (which admittedly might be a smaller concern than being dead).
Because it's hard to imagine that he literally spent his entire life in the water, we think he might be talking about more than just swimming at this point.
Maybe swimming is actually a metaphor in this poem. What could it represent?

And not waving but drowning.

This line is one last repetition, returning to line 4 and the title.
Lines 10-12 and 2-4 are so similar that we can go ahead and call this type of repetition a refrain.
Ballads and other songs often have a part that repeats itself several times, sometimes changing slightly. Just think of the refrain as the chorus of a pop song.
We already know whatever information this line gives us, so it must be here for emphasis, not further explanation.
But combined with the rest of this stanza, we at least get a correction to the speakers of the second stanza, who think that the man's death was an unexpected accident.
He was always out of their reach and was always signaling for help as he drowned. He was most definitely not goofing around and waving at them.
It sounds like they were wrong about his loving "larking." In fact, they plumb misunderstood him. Probably for years. So can we trust anything they say about him?
With friends like these, you'd be better off with a flotation device.
We're left pondering what the dead man means by drowning, but we have a pretty good idea that he's not just talking about a single failure to keep afloat. It sounds like a life-long, isolated struggle of some kind. The tone has definitely changed back to the tragic.
To make things even grimmer, here he is dead and still complaining about it. What sort of after-life is that?