And there we were all in one place

Woodstock.

A generation lost in space

Some people think this is a reference to the US space program, which it might be; but that seems a bit too literal. Perhaps this is a reference to hippies, who were sometimes known as the "lost generation", partially because of their particularly acute alientation from their parents, and partially because of their presumed preoccupation with drugs.

It could also be a reference to the awful TV show, "Lost in Space", whose title was sometimes used as a synonym for someone who was rather high...but I keep hoping that McLean had better taste. :-)

With no time left to start again

The "lost generation" spent too much time being stoned, and had wasted their lives? Or, perhaps, their preference for psychedelia had pushed rock and roll so far from Holly's music that it couldn't be retrieved.

So come on Jack be nimble Jack be quick

Probably a reference to Mick Jagger of the Rolling Stones; "Jumpin' Jack Flash" was released in May, 1968.

Jack Flash sat on a candlestick

The Stones' Candlestick park concert? (unconfirmed)

'Cause fire is the devil's only friend

"Sympathy for the Devil", by the Stones -- seems to fit with some of the surrouding material.

It's possible that this is a reference to the Grateful Dead's "Friend of the Devil". But I doubt it.

An alternative interpretation of the last four lines is that they may refer to Jack Kennedy and his quick decisions during the Cuban Missile Crisis; the candlesticks/fire refer to ICBMs and nuclear war.

And as I watched him on the stage
My hands were clenched in fists of rage
No angel born in hell
Could break that satan's spell

While playing a concert at the Altamont Speedway in 1968, the Stones appointed members of the Hell's Angels to work security (on the advice of the Grateful Dead). In the darkness near the front of the stage, a young man named Meredith Hunter was beaten and stabbed to death -- by the Angels. Public outcry that the song "Sympathy for the Devil" had somehow incited the violence caused the Stones to drop the song from their show for the next six years. This incident is chronicled in the documentary film "Gimme Shelter".

It's also possible that McLean views the Stones as being negatively inspired (remember, he had an extensive religious background) by virtue of "Sympathy for the Devil", "Their Satanic Majesties' Request" and so on. I find this a bit puzzling, since the early Stones recorded a lot of "roots" rock and roll, including Buddy Holly's "Not Fade Away".

And as the flames climbed high into the night
To light the sacrificial rite

The most likely interpretation is that McLean is still talking about Altamont, and in particular Mick Jagger's prancing and posing while it was happening. The sacrifice is Meredith Hunter, and the bonfires around the area provide the flames.

(It could be a reference to Jimi Hendrix burning his Stratocaster at the Monterey Pop Festival, but that was in 1967 and this verse is set in 1968.)

I saw satan laughing with delight

If the above is correct, then Satan would be Jagger.

The day the music died
He was singing...
Refrain