When my Mum was a little girl, she was convinced that a certain Christmas carol went: "Good King Wensus last looked out..."
Most obvious twisted lyric in my opinion has to be the chorus of The Police's "So Lonely", which sounds like they're chanting the name of Sue Lawley, one time BBC newsreader and Nationwide presenter.
If anyone really wants to get some lyric seriously wrong, try listening to the early albums of IQ without the lyric sheets. I did this with a friend, and we tried to work them out. About two years later, we finally got access to the words, and found out that we'd only been about 50% accurate. It still makes life a bit difficult trying to sing along at their gigs!
A childhood belief about misheard lyrics

others believed things like this
- I always wondered why shepherds washed their socks by night. (correct lyric: watched their flocks)— MaggieNJ
- A common misheard lyric in BMTH’s ‘Shadow Moses’ is “THIS IS SANDPIT TURTLE!”— Oli
- My sister just recently realized that the lyric "more than a woman" wasn't 4 letter woman!— Anne
- I was told that for every christmas carol i sang before christmas time santa would give me one less present!— K
- When listening to the radio in the mornings I felt sorry for singers they had to come and sing that early. — Tereza
- When the police are talking about "rap sheets," I thought that the criminals were making rap music.Anon