Thanks everyone for your answers. They are helpful. I ran this question past a friend of mine too just as I posted here and this is what he wrote to me:
"The chord is a Gmaj7,but not the basic one.And later in the chorus he strums a Bminor chord, which is very similar in the fingering.I guess I might demonstrate that sometime, although you could figure this info out with a decent chord chart.So,capo @ 2nd fret, the chords would read: G Am D7 [2X] Gmaj7 C G D , that's the verse. The chorus would follow: F G [2X] Bm C G D. Works for me! The key is actually in A! I still think it's amazing for the song to be one of his first!! It's a poignant tune [i think]."
Chordie actually helped me a great deal figure out how Prine was playing this song on his DVD. It is not how he plays it from
iTunes as a single. There he's using C Dm G -/ / Em - F/ C - G -:// And the verse has a very ugly Bb in it, which I find difficult which is why I wanted to shift to the key of A. Pick your poison I guess, I have yet to figure out that dang Gmaj7 so it's either that or the damned Bb.
We love John Prine though. He's great for a beginner guitarist.
Keep on pickin