How this 'As' grammatically works?

Question

This is a lyric of "Still Alive", the main theme of a famous game 'Portal'.

I'm not even angry.
I'm being so sincere right now.
Even though you broke my heart.
And killed me.
And tore me to pieces.
And threw every piece into a fire.
As they burned it hurt because
I was so happy for you!

And I can't quite comprehend the last two lines as I can't figure out how the 'As' works.

Since this game is very famous, the song was translated to my mother tongue language.
Thanks to the version, I regard the lyric as nearly equal to:

...
And threw every piece into a fire.
Even though it hurt me a lot to get burned,
I was still so happy for you!

This reading corresponds to the game scenario.
(She actually not even angry to get killed by the player. She ultimately won)
In my understanding, the 'As' or 'Because' in the original lyrics should work as contrastive conjunction.

But I think 'As they burned' in the original lyric is an adverbial phrase modifying 'it hurt'.
With the view, that lines become:

() it hurt because I was so happy for you!

sounds like it hurt because get betrayed.
This reading doesn't correspond to the translated version nor to the scenario.

1. Is the reading correct?
2. How this 'As' grammatically works?
3. Who/What is 'they'? the fire? 'you'?

Answer 1

"As" means "while" here, and "they" refers to "pieces." The sense of this is:

While the pieces of me burned, I hurt because I was so happy for you.

The "it" is the dummy it, which is often used with the verb to hurt. And "I'm so happy it hurts" is an idea we have in English that may or may not translate well.

Another possible interpretation is that the "it" refers to "burning." This would give a similar but slightly different interpretation:

While the pieces of me burned, the burning hurt (but only) because I was so happy for you.

The translation captures the meaning nearly enough, but it is grammatically somewhat different.

I love this song!