Kewl, thanks. I'm also puzzling over that one line. I think it needs to be read in conjunction with the following line:
You'll never defeat us if you make us prisoners; 0nly after death will we give up.
Alternatively: "You'll never defeat us by making us prisoners," Which could be a way of saying, "We won't give up."
I think you got it right: is a two verse idea.
I'll phrase it more like:
"There will never be defeat if they made us prisoners
As only after dead we'll capitulate"
And the last one I think is better:
"I'll never be afraid when in column with the Tercio"
It keeps changing person and number of verbs all the time.