Nobody knows for sure, but here are some thoughts.

The song was written after the Beatles were going through fan mail, and they picked one out at random, which turned out to be from a school John had attended when he was young. And, the letter said that they were analyzing the lyrics of his songs in class. So, John wrote the nonsensical I Am The Walrus, largely based on The Walrus & The Carpenter by Lewis Carroll. It has been said that some of the lines were written by John under the influence of LSD, but Paul had nothing to do with it. It was John scribbling on scrap paper (I believe some of the handwritten lyrics to this song were auctioned off a couple years back). Semolina Pilchard, by the way, was a combination of two names of nasty foods John remembers eating as a child.