Stanza 2 Summary

Get out the microscope, because we’re going through this poem line-by-line.

O hark, O hear! how thin and clear,
And thinner, clearer, farther going!

The speaker asks us to "hark," or to listen to the "clear" notes of the bugle horn. Calling the note "thin" probably may mean that it's high-pitched, and it may mean that the bugle player isn't using a lot of fancy vibrato—it's just a clear, single note.
The sound of the bugle is so "thin" and "clear" that it travels far on the air and echoes off of the mountains.

O sweet and far from cliff and scar
The horns of Elfland faintly blowing!

The speaker imagines that the bugle notes that he hears are coming from "Elfland," which is—you guessed it—the land where elves live.
"Elfland" comes up in Old Norse and Anglo-Saxon mythology. Different myths treat it differently, but it's most often a kind of parallel universe or an alternate reality to this one. Fairies and elves can cross over between Elfland and our world at certain places, where the border between worlds is especially thin. The speaker of this poem must imagine that the valley is magical—that it's a place where the border between Elfland and the real world is almost non-existent, so that he can hear the bugles from Elfland in his own world. You can imagine "Elfland" as a fairy tale, Lord-of-the-Rings kind of place.
The speaker also tells us that the bugle notes are coming from "far" away, and are echoing from a "scar." How can a mountain have a "scar"? What can that possibly mean?
The "scar" in the side of the mountain "cliff" probably refers to a kind of gap or cleft in the rock face that looked like a scar in the cliff. The "scar" would provide extra space for the sound of the bugle to echo. But it's also figurative—it's personifying the cliff by making it seem like a human face with a "scar" on it.

Blow, let us hear the purple glens replying:
Blow, bugle; answer, echoes, dying, dying, dying.

The speaker again calls on the bugle to "blow," because he wants to hear the echo from the "purple glens."
It's another example of apostrophe, since the speaker is addressing the bugle directly.
A "glen" is a valley—it's probably described as "purple" because the speaker is viewing the scene at sunset, so the sunlight has a deep reddish-purple tint to it.
Again, the bugle echoes around the valley and slowly fades or "dies" away.
Does the line 12 look familiar to you? That's because it's repeated from the first stanza, so it's like a refrain or a repeating chorus. It's kind of catchy, too, except for all that "dying" stuff.
Considering how beautiful the scene is, it seems weird that the speaker keeps harping on death and "dying." Maybe the fact that the light is dimming at sunset and the echoes continue to fade makes him think about death. Let's read on to see if this gloomy mood continues…