Raise your hand if you didn't understand much of what he sang in "Goodbye Yellow Brick Road".
Me! The "owl in the woods" came as a total surprise when I bothered to look up the lyrics, I thought it said "Back to the house on Long Island".
Not mis-heard but one that always stands out to me because of the emphasis in the meter is Fleetwood Mac's "Dreams": "When the rain wa-SHEZ you clean you'll know".
Others:
"I Melt With You" by Modern English:
"The future's open wide"
I heard:
"Confucius, open wide"
"Redemption Song" by Bob Marley:
"Minutes after they took I from the bottomless pit"
I heard:
"Minutes after they took I from the Bottomley Spit" (I figured it was some Jamaican location).
Steely Dan "Your Gold Teeth":
"Even Cathy Berberian knows
There's one roulade she can't sing."
I heard:
"Every café Bavarian knows..."
Steely Dan "Bodhisattva", I head "Buddy Cypher".
The Who "Baba O'Reilly":
"Don't cry, don't raise your eye"
I heard:
"Don't cry, don't plagiarize"
Then there are the lyrics that I didn't really misunderstand, but think of something I find funnier. As an example, Paul Simon "Love Me Like a Rock", "I'm a constipated boy" instead of "consecrated boy." Or substitute a different rhyme, which are usually too off-color to give an example here. Luckily my wife has the same sense of humor, as well as great patience.