As the Lady floated down the stream toward Camelot, she laid down and sung until the curse took her life. At first the inhabitants are curious. They had heard a mournful song and then come to find a dead woman in a boat. After this, perhaps intuiting a sense of the curse (or simply fearful of seeing a dead body floating down the stream), the people cross themselves in prayer:
And in that lighted palace near
Died the sound of royal cheer;
And they crossed themselves for fear,
The poem illustrates a reversal of "looking." The Lady had looked (indirectly) upon those outside of her tower and the direction toward Camelot for some time. The inhabitants had heard the Lady but had never seen her. The Lady had written "The Lady of Shallot" on the prow of the boat. Upon seeing this, the inhabitants now had a face to go with the mournful songs they had heard. The Lady is dead by this point, so their reactions turn from curiosity to fear as they now have a ghostly face to go with the memory of her mournful song.