Devil Town is indeed a fine piece of American Music par-excellence. But, I wouldn't read metaphor into it. I believe Johnston was talking about actual vampires living in Devil Town. Johnston suffers from some mental imbalances, and is also very religious. Devil Town would literally be where the Devil would be living. If there's a metaphor, he is talking about living in a world of sin, brought on be people who have been enchanted by the Devil.
But anyways, amazing song, AMAZING artist - one of my favorites.
In many ways this "theory"/theme corresponds to the behaviour observed in clinical narcissism. It's generally not healthy, though, IMO, to think with the vampire metaphor.
> The Mountain Goats - Damn These Vampires
> Bright Eyes - Devil Town