Ed Driscoll posted this at Instapundit, and it reminded me of several other such occurrences.
Other favorites of mine include some which were written by a preacher's kid, many years ago. He (or she?) heard dad preaching every Sunday and misunderstood those sonorous tones. Dad spoke of "the King Eternal" and the kid heard "the kinky turtle." Dad also read the hymn title, "Gladly, the cross I'd bear" and the kid heard "Gladly, the cross-eyed bear." During burials the dad spoke the phrase "and the Holy Ghost" which the kid heard as "in the hole he goes."
I have my own examples as well, my mother-in-law misheard her mother describe a roller coaster as a "cynic grayway." Her mom probably said "scenic railway," an old-fashioned name for coasters.
My own parents pronounced the words "pin" and "pen" identically, like "two" and "too." It wasn't until I married a phonics teacher that I came to understand they are correctly pronounced differently, and actually learned to do so when I (rarely) make the effort. It still seems stilted to me.