When I was ten I was suddenly confronted with the anguish of moving from the only home I had ever known. My whole life, brief as it was, had been spent in that big old house, gracefully touched with the laughter and tears of four generations.

本句中的touched为形容词，常与with连用，意为：

having a small amount of something — usually + with

具有/带有/显示出某种、某些特征/性质。

词典例句：

His hair was touched with grey.

Some of her poems are touched with real genius.

由于介词with后的宾语为四代人的喜怒哀乐，故touched的逻辑主语应该是 big old house. 即形容词短语作big old house的非限制性定语，对big old house作补充说明。

由于其逻辑主语并不是句子的主语my life, 因此这不是过去分词作状语。其逻辑主语也不可能是“我”。gracefully为拟人用法，可以翻译为“优雅地”。

My whole life, brief as it was, had been spent in that big old house, gracefully touched with the laughter and tears of four generations.

我的一生虽然短暂，却是在那座古老的大房子里度过的。这幢房子优雅地记录着我家四代人喜怒哀乐。