How does the narrator know what Ethan is thinking and feeling in Ethan Frome?The narrator is an outsider who pieced together this story about...

You bring up a very interesting point about this novel,
and you kind of answered your own question in your posting.  The narrator of the novel
is an outsider to the world of Ethan Frome.  He is in the "frame story" of the novel. 
The frame story is the narrators story about noticing Ethan in town, being intrigued by
him, his talking to the townspeople about the Fromes, and his time actually spent with
Ethan on the trip and at his home.  In the chapter before chapter one he makes it clear
that what follows is what he "imagines is his vision" of what happened with Ethan,
Mattie, and Zeena.  He knows enough of the facts to understand the background of the
story, and from there he tells us directly that he is piecing together what he thinks is
a logical sequence of events.  He acknowledges that he is  creating a fiction around the
facts.  It is an interesting and unusual choice on Wharton's part to write this novel
this way.  What is important to realize is that even if some of the narrator's
suppositions are incorrect, the results of the story are unchanged.  Ethan is broken
man, eking out a living on a broken farm with two emotional broken
women.