Song lyrics that I have misunderstood entirely and replaced with nonsensical versions of what I hear:
Smooth Operator (Sade): "smooth operator" became "smooth of a red R"
What's Love Got to Do With It (Tina Turner): "what's love, but a second-hand emotion" became "what's love, but a sack in handy motion"
Tiny Dancer (Elton John): "lay me down in sheets of linen" became "lay me down and she's so gladly"
And finally, the best, all-time craziest lyric replacement I have made, one that Mike will never let me live down, and will always serenade me with whenever the song comes on:
Dolphin's Cry (Live): "love will lead us, alright, love will lead us, she will lead us" became "Lolita's alright, Lolita's shape will meet us"
The only reason I admit these is because they really are hilarious even to me, and I KNOW that everyone has done this (feel free to share your own lyric blunders!). The thing I can't figure out is why people will come up with lyrics that make absolutely no sense (mine being the prime example).
And if you want to get a laugh out of some other lyric mishaps, I discovered a site called Kiss This Guy (in reference to the Jimi Hendrix lyrics "kiss the sky", I think from Purple Haze).
My favorite misheard lyrics by far are, instead of "Shadrach, Meshach, and Abednago" (a Beastie Boys song), "smack my midget and then we'll go".