This is the story I heard originally about the song, that it was from a line that Peter Fonda kept repeating. Later I read that a more detailed account of the story that explained it came from an incident at a party where someone had a "bad trip" and cried out that he/she was dying. Peter Fonda tried to calm the situation down by saying, "You're OK, I know what it's like to be dead" - and he actually did know, because he had briefly flat-lined during surgery following an boyhood accident when he was accidentally shot in the chest. John Lennon, of course, knew none of the backstory and told Fonda "You're making me feel like I've never been born."