Mine:
Boston’s “Peace of Mind,” actual lyrics:
I understand about indecision
But I don’t care if I get behind
Someone else’s:
Duran Duran’s “Girls on film,” actual lyrics:
Girls on film, Two minutes later
Mis-heard: Too many Taylors
Recently I heard “Tear You Apart” by She Wants Revenge on the radio for the first time in forever. So yesterday I watched the YouTube video and something didn’t sound quite right. So I Googled the lyrics. Turns out when they sing
Soft breath, beating heart
I was always hearing it as
Soft breasts, beating heart
Drops of Jupiter by Train
Lyric: And heaven is overrated
Heard: Van Halen is overrated
I still think mine is better.
+1
Gloria in eggshells this dayo. True story.
Real lyrics: “Sundown, you better beware”
What I heard: “San Bernardi-i-i-no”
I actually sing this as “Later on, we’ll perspire / As we sit in the fire.”
Guess Who’s American Woman: I thought it was “colored lights can hit the skies.” Nope. “Colored lights can hypnotize.”
Rita Coolidge - “We’re All Alone”
What I heard
Close the window
Come alive
Last year or so I decided to look up the lyrics, turns out it’s
Close the window
Calm the light
I’ve never heard that phrase before (but I know what it means now) so I’m guessing that’s why my brain changed it into something I’d understand.
I know the correct lyrics now, but I still hear it as “not talkin’ bout The Living”… which gave it a weird zombie-vibe. 
Flashdance (What a Feeling)
misheard:
“Take your pants off, and make it happen”
lyric:
That’s NOT the lyric?!
I heard: I’m not talkin’ about the limit
Coola nd The Gang’s “too Hot”:\what they sang:
“It’s too hot, too hot, gotta run for shelter, gotta run for shade”
-What I heard:
"it’s two o’…gotta run the bunker, gotta mess we made"clock, two o’;clock
I thought of another misunderstood lyric.
Oh, the man who has plenty of good peanuts
But giveth his neighbour none
He won’t get any of my peanuts
When his peanuts are gone
As a child I took it as meaning that the greedy man was too proud to ask for any of my peanuts, not that I would punitively withhold peanuts from him.
Yeah. I was a kid when everyone on every variety show sang this song. I thought it was Janet Blair.
A couple more:
Reach Out by The Sweet
Lyric: Just look over your shoulder!
Misheard: Tecalote show!
(I lived near Tecalote Canyon when I was a child.)
Whip It by Devo
Lyric: Try to detect it
Misheard: Tattoo detective
In reality, I may only be wishing I’d misheard it that way. Too long ago to remember.
When I was a kid, I thought the Peter Gabriel song “Shock the Monkey” was about a monkey named Jacques.
Amanda Marshall’s “Birmingham.”
I thought for sure that the chorus was “Shining Like an Allegheny Moon.” Have a camping trip planned to Allegheny state park in a bit, I thought I’d be cute and put it into a road trip play list.
I was completely baffled when I couldn’t find the song by searching for those lyrics. Widening my search terms showed me that the lyrics are “Alabama moon.” 
Looking at a Youtube comment I may not have been the only one, but in The Yardbirds “You’re a Better Man than I” instead of the correct lyrics:
Mister You’re a Better Man than I
For a long time I heard it as
Misty You’re a Better Man than I
There are a lot of really good one’s here but this in particular has me giggling, seeing as when this song was recorded 3 out of 5 members of the band had the surname Taylor.
[QUOTE=Greenelf]
Flashdance (What a Feeling)
misheard:
“Take your pants off, and make it happen”
lyric:
[/QUOTE]
Hilarious and much better than the real lyrics.
From Love the One You’re With:
Actual: There’s a rose in the fisted glove . . .
Misheard: There’s a road in the distance, love . . .
As heard and sung a zillion times:
You picked a fine time to leave me Lucille,
with four hundred children and a crop in the field . . .
Correct:
With four hungry children and a crop in the field . . .