(I kinda hope this is the last we hear of it. The book authors have pretty much beat this poor piece into the ground.)
Anyway, so we find our heroes rushing home, to the same rising G-A-Bb-C-D-Eb-D (Bb G) figure (in measure 136) which starts the piece. We begin the line "er halt in Armen das achzende Kind" (m. 137) in stable but dark G minor (good for the word "he holds"). The bass octave G becomes a pedal tone as we move to ii half dim 42 and back to G minor over "in his arms", and then the G supports a V7/iv ("groaning" - nice word painting, Schubert) before it finally gives up the stretto and repeats the rushing figure, this time in C minor (iv), with the word "child".
This is where it gets kind of interesting. Although the singer won't tell us that the child has died until the penultimate measure, the pianist actually narrates the event harmonically. Measure 141 starts predictably where we left it, in C minor, but now the right hand takes over the frantic octave C, while the bass moves through a sort of chromatic, elongated reiteration of the rushing motive, eventually arriving at Ab (m. 143), where the right hand C fills out this Neapolitan tonicization. I think this is my favorite part, because here Schubert slows down the rushing motive and sets it chromatically (Db-D-Eb-E-F-G-Ab) to signify the father's arrival, finally, home. But something is off, and different - and we realize, once the Neapolitan is reached, that that figure wasn't just the father's arrival - it was death slowly overtaking the riders: the child is dead. The N6 works perfectly to illustrate this - we arrive, fairly abruptly, without proper voice leading or preparation, at this strange major chord which expresses a minor mood, only a half step away from tonic and yet it feels so far away from the stability of G minor. This can only symbolize death. We have suddenly found ourselves in this bII harmony, like the child's sudden departure from this world. The chord is strangely major but evokes a strong minorness - again, the way the dead look so strangely and peacefully asleep. Also, we are a half-step from tonic - basically as close as we can get - but, like the dead child resting in his father's arms, so physically close to him, in actuality the N6 chord and the child are mournfully far from anything that feels like a stable tonic, or home.
The singer is catching us up (m. 143-145, "he arrives in the courtyard, with effort and distress") as the pianist emphasizes the Neapolitan tonicization through another pedal point bass Ab against vii042/bII in the right hand, returning to Ab in measure 145. At this point, the frantic triplets that have characterized the entire forest ride slow and become softer, eventually resting in measure 146 (again, like death! or probably the father's realization of his son's death). In recit style, the narrator tells us what we already know: "In his arms, the child was dead". (PS - the "was" in that phrase proves my theory - the child died in measure 143 with the N6.) Since we, the living, cannot follow the poor boy to the world beyond, we must return sadly home, and Schubert's pianist helps us return to our dismal G minor (m. 147-148) through a tortured viio7/V and an inevitable, grieving V7.
I feel horribly depressed, but it's true - the Neapolitan chord here symbolizes the passing of the child and the harmonies complement the sung story and give us every blow-by-blow detail. But I suppose the major-ness of the Neapolitan may signify some kind of "he's in a better place" sentiment.
As a final thought... does anyone else see Golem as the Elf King?