The term "mondegreen" was coined by Sylvia Wright in a 1954 Atlantic article. As a child, young Sylvia had listened to a folk song that included the lines "They had slain the Earl of Moray/And Lady Mondegreen." As is customary with misheard lyrics, she didn't realize her mistake for years. The song was not about the tragic fate of Lady Mondegreen, but rather, the continuing plight of the good earl: "They had slain the Earl of Moray/And laid him on the green."
Mondegreens can be found in every area of the spoken word, from the record-buyer who asks for a copy the Queen single "Bohemian Rap City" to the schoolchild who is convinced that the Pledge of Allegiance begins "I led the pigeons to the flag." They tend to be about primal concerns: food, sex, animals. Any misheard lyric is an impromptu audio Rorshach test. It can be alarming to discover that significant parts of our brains want pop songs to cover the lyrical topics of cheese, walruses, and clowns. Songwriters take note: There is a large, untapped market for songs about food.
I came across this when googling to remind myself who sang "Bad Moon Rising" (the background music for a US Navy powerpoint presentation my father forwarded). Creedence Clearwater Revival's line "There's a bad moon on the rise" is frequently misheard as "There's a bathroom on the right." From there straight to mondegreens.