I have a couple of them...
My brother thought that 'Black Whole Sun' by Soundgarden was 'Asshole Sun'.
He also thought the Franz Ferdinand song 'Take Me Out' when the singer says, "I'm just a crosshair," he thought they said, "I'm just a cross-eye."
And this is my belief, in the song 'Not Your Bottle' by the Dandy Warhols, when the singer says, "Passing out hits of LSD." I thought he said, "It's my LSD." To my embarrassment when I sang that out loud!
A childhood belief about misheard lyrics

others believed things like this
- I thought that singer/songwriter was spelled this way: sing-a-song-writer...Anon
- I thought that Whoopi Goldberg was a singer until I was about 10Anon
- I thought that the name of singer "Dinah Shore" was "Dinosauer" and that she must be awfully old.— Sandy
- i thought I got one year older when my family sang the birthday song.— I am the ghost
- I thought that Tommy Lee (the singer) and Tommy Lee Jones(the actor) were the same exact person.— Glowworm
- When I first heard Bruce Springsteen's song, "Born in the USA," I thought that the song was "Porn in the USA"Anon