I’m partial to “Don’t Let Your Son Go Down On Me”, especially when George Michael covers it. 
Nondegreen?
I used to think Sting’s “Be Still My Beating Heart” was about lust or something.
And she sleeps in heavenly peas.
mmmmm, peas
King Harvest’s Dancing in the Moonlight:
One of the verses starts:
Everybody here is out of sight.
They don’t bark and they don’t bite
…
But because of the way he sings the first word on the upbeat, for years I always thought it was:
Everybody!
Here is out of sight.
They don’t bark…
I thought he meant “this place is out of sight”, and I always wondered who “they” were.
The Beatles Get Back:
Paul’s ad lib at the end:
Get back Loretta. You’re mama’s waitin’ for you. Wearin’ her high heeled shoes, and her low neck sweater. Get back home Loretta.
For 30 years of being a major Beatles fan, I could never figure out why Loretta’s mom was wearing high heeled shoes and a low neck sweater, and what it had to do with waiting for her daughter to come home. When it finally hit me that it was Loretta who was wearing those things, I laughed at myself, and then thought, “geez, bad phrasing, Paul.”
Consider “The Boxer” by Simon and Garfunkel, the final verse. Is it:
or should the final lines be parsed this way:
In other words, who is saying they’re leaving - the narrator or the boxer?
Is “Baby Got Back” a sequel to “Get Back”?
Wrecking Ball as sung by Emmylou Harris.
*Meet me at the wrecking ball
wrecking ball, I’ll wear something pretty and white
And we’ll go dancing tonight
Meet me at the wrecking ball
wrecking ball, I’ll wear something pretty and white
And we’ll go dancing tonight *
I though it was an actual wrecking ball.
Why would you wear something pretty and white? Wrecking balls are dirty, and probably not the safest place for a date.
It wasn’t until I heard Gillian Welch sing it, that I realized it was Ball = dance.
The meaning to Frosty the Snowman changes significantly with one word change;
*Frosty the snowman knew
The sun was hot that day,
So he said, “Let’s run and
We’ll have some fun
Now before I melt away.”
Down to the village,
With a **boomstick *in his hand,
Running here and there all
Around the square saying,
Catch me if you can.
Prequel.
Also – a “clearing” is something in which you build a log cabin. What’s it doing in an urban setting?
When I asked my husband early in our marriage whether papa left Temptations ‘alone’ or ‘a loan’ he wondered why he married me. Because he could have left them in debt, which to me would be worse than just alone.
Sticking with the Christmas music theme…
I figured that “certaining” someone was a process akin to reassuring them. You know, since that was the purpose of the first noel?
Those poor shepherds needed certaining. They were probably kind of riled up and upset by that weird star and all that, right?
It could be a clearing in a crowd gathered around a fight, though I always pictured it as clearing in the woods in Central Park.
I always heard it that way, too, though I’m just chronically paronomastic…
Speaking of whom, I always thought their “Cloud 9” song, though to me obviously ironic, could sound like a hard-sell commercial promoting drug use.
She’s a maniac, maaaaniac on the floor.
And she’s dancing like she’s never danced before.
You mean, she’s dancing as if she’s never danced before? That can’t be good.
Ring my bell, ring my bell.
First, I thought this was about bluebells. Then, I thought it was about ringing a bell. But why does she have a bell (the instrument) and why can’t she ring it herself?
The closing song (and by far the longest) on the first Black Sabbath LP is called “Warning.” It was not written by the Sabbs, but is a cover of a song by Ansley Dunbar. Once, a friend and I were singing it at school:
I was born without you baby,
But my feelings were a little bit to strong.
Another friend heard us and jeered at us. He said he knew the original Ansley Dunbar version, and said the lyrics should be “I was warned about you baby.”
Later, we had the opportunity to play him the actual Black Sabbath record. He exclaimed, “You’re right! He does say ‘I was born without you baby’!”
Of course, the song is called “Warning,” and it is about a guy who is so attracted to a woman that he sticks to a relationship with her despite having been supernaturally warned that she is going to hurt him. Clearly “I was warned about you,” makes much more sense, and must have been the originally intended lyric (although “I was born without you” does carry some emotional punch). However, Ozzy pretty clearly sings “I was born without you,” and at least one internet lyric site agrees (I did not check further).
This seems to be a case where the singer himself got the lyrics wrong.
Of course, it is Ozzy Osbourne. I guess he was befuddled even back in 1970. 
Maybe there should be a new category of mondegreens, perhaps entitled “Sugar Bears”, where you can clearly hear the actual lyrics, but since they make no sense, you substitute a phrase that sounds similar and has the advantage of making a lot more sense.
For in the Sabbath song, I too heard “I was born without you baby”, and then when I realized the song was called “Warning”, also thought it MUST be “I was warned about you baby”. But apparently no, it really is “born without.”
Also in this category, the Stone Temple Pilots song Plush. “Where you goin’ with the mask you found” makes no sense, so I thought it must be “where you goin’ with that mastiff hound”, since elsewhere in the song it describes “dogs begin[ning] to smell her”. But no, “mask” it is.
At the church my family attended when I was younger (probably 6 years old or so), we sang a song containing the lyrics, “By the anointing Jesus breaks the yoke.” Not being particularly familiar with tilling fields or the metaphors that could be associated therewith, but well versed in eggs & the various ways to cook them, I assumed our Lord was making an omelet.