I think my most amusing misunderstood lyric is “My pony plays the mamba” from “We Built This City on Rock and Roll” by Starship.  The real lyrics (I think) are

Marconi plays the mamba, listen to the radio, don’t you remember
We built this city on rock and roll? 

Another infamous mumbler is Eddie Vedder of Pearl Jam.  I’m sure there are a lot of misunderstood lyrics in the Pearl Jam catalogue, but I won’t start.

 Update: Apparently, my mishearing is not the most amusing.  Amanda Owens believed the lyric was “My colon plays La Bamba,” which, I admit is much funnier.