"In Memory of W. B. Yeats" alludes, indirectly, to Yeats's poetry as well as his life.
For example, "The peasant river was untempted by the fashionable quays" evokes Yeats's love of Irish folklore and folk culture. His poetry often celebrates what Auden called "the virtues of the peasant," and he once edited an anthology called Fairy and Folk Tales of the Irish Peasantry (1888). However, Auden believed Yeats's love of the "peasant" was in some ways hypocritical and patronizing, since Yeats also courted the favor of the aristocracy. Thus, the symbolism of this line is ambiguous: both the humble "river" and the "fashionable quays" could represent aspects of Yeats's work and life. (See the Symbols section of this guide for more.)
"To find his happiness in another kind of wood" (line 20) also echoes various moments in Yeats's work, as well as in older literature. The line refers to Yeats's literary afterlife, the way his work will endure in the hearts of posterity. Yeats himself imagined the afterlife as a supernatural wood in works like "Cuchulain Comforted," one of his last poems. In "Sailing to Byzantium," one of his best-known poems, he imagines spending his own afterlife as a golden bird on a "golden bough." So Auden may be implying, here, that Yeats's afterlife will be different than those he imagined, yet still "happ[y]" in its way. Moreover, the Italian poet Dante (1265-1321) famously imagined life as a journey through dark woods (the opening line of Dante's Inferno places its author in the middle of the journey). This literary echo, too, suggests that Yeats has departed one kind of life for another.
Lines 58-59 ("With the farming of a verse / Make a vineyard of the curse") probably allude to Yeats's poem "Adam's Curse," which in turn alludes to the biblical Fall of Man (see Genesis 3:13-19). Yeats's poem stresses the hard work that goes into writing poetry; Auden suggests that this work can be redemptive.
Finally, lines 52-53 ("And the seas of pity lie / Locked and frozen in each eye") seem to allude to the fiction writer Franz Kafka (1883-1924), who famously wrote: "A book must be the axe for the frozen sea within us." In other words, literature should make us feel something! Auden echoes this idea in the following stanzas, as he urges the "poet" to move the stubborn "heart[s]" of readers.