Your story caught my eye because I simply love that song. It's one of my favorites to sing at the top of my voice when I'm all alone in the house, or quietly with freinds around the campfire. But I don't suppose that's really what I should be talking about here.
I liked the idea of writing a sort of background story to the song. However, I think you could have gone a litte more beyond what is said in the song. Try and make it stand more as a story on its own, for example, without so many phrases taken directly from the song. Also there's a few spots where the wording's a bit rough, for example, at the begining, "but what her mother and father had interested in it she had no idea".
One thing I really liked was the decision to make one of the main characters very young and the other somewhat older, but being kind all the same. It lends something of innoncence to the story. It would be so easy to make them cliched star crossed lover types, but I believe that this is much better. Also, having him actually die at the end and the "one tin soldier rides away" be just words seems really powerful.