I did this by ear; hopefully it's correct.  If you want to play the version from 
his album, "Acoustic," put a capo on the second fret.

Possibly uncommon chord shapes (I only put F in there so you didn't use the bar chord).

G/D     F       Am/G     D7/F#     Fm7      C7/G   
e 3     e 1     e 0      e 2       e 1      e 0
b 3     b 1     b 1      b 1       b 4      b 1
g 4     g 2     g x      g 2       g 1      g 3
d 5     d 3     d 2      d 0       d 1      d 2
a 5     a x     a 0      a x       a 3      a x
E x     E x     E 3      E 2       E 1      E 3

Watching the Wheels

C/G                   Fmaj7/C       C/G
People say I'm crazy doing what I'm doing
                                      Fmaj7/C           C/G
Well they give me all kinds of warnings to save me from ruin
Fmaj7/C         Dm                 G
When I say that I'm o.k. well they look at me kind of strange
Fmaj7/C           Dm               G
Surely you're not happy now you no longer play the game 

People say I'm lazy dreaming my life away
Well they give me all kinds of advice designed to enlighten me
When I tell them that I'm doing fine watching shadows on the wall
Don't you miss the big time boy you're no longer on the ball 

Fmaj7/C  G/D                       C                   Am
I'm just sitting here watching the wheels go round and round
Fmaj7/C  Dm                        F
I really love to watch them roll
G                       Am        Am/G   D7/F#   F
No longer riding on the merry-go-round
       Fm7              C/G  Fmaj7/C  C/G
I just had to let it go 

Ah, people asking questions lost in confusion
Well I tell them there's no problem, only solutions
Well they shake their heads and they look at me as if I've lost my mind
I tell them there's no hurry
I'm just sitting here doing time 

I'm just sitting here watching the wheels go round and round
I really love to watch them roll
No longer riding on the merry-go-round
                          C/G  D7/F#  F
I just had to let it go
       Fm7                C/G  D7/F#  F                   
I just had to let it go
       Fm7                C7/G
I just had to let it go