I see each grain of sand that makes up the 'castle' as an experience that we have been through, whether it be blinking our eyes or getting stoned for the first time, even making love. All of that builds this castle and the sea can either play death (second verse) and wash that life away to make room for other castles to be created, which in turn adds on an experience to other pre-existing castles.
The sea could also be seen as maybe karma (not sure if that's the correct term to use) for example in the first verse. The man has created a love triangle between his girl and his liquor. The sea plays as karma to wash away his castle, this is because he built his castle too close to the water therefore, he must learn from his mistakes (mistreating his girl, letting the liquor get the better of him, etc) and go on in life.

I hope this makes sense when I come down. If it doesn't, oh well, it sounded good at the time.