A brilliant piece written by legendary songwriter Leon Payne, and performed by Jack Kittel. I managed to dig up some info on it here and here.
What I can unravel is as follows: 'Psycho' was written in 1966 by a prolific blind songwriter Leon Payne, who's music career stretched back to the 1930s and who's writing credits include such classics as 'Lost Highway' (Hank Williams) and 'I Love You Because' (Elvis Presley and Johnny Cash). Depending on who you believe, Payne wrote 'Psycho' in response to a notorious mass shooting spree at the University Of Texas and the strangely affecting letter the shooter left next to the bodies of his mother and wife, or to the story of murderer and grave robber Ed Gein (who also inspired Bloch's book/Hitchcock's movie of the same name), or possibly both. - Record Hunting in Australia
Speaking of Australia, Beasts of Bourbon also recorded a great version: