The American author Sylvia Wright coined the useful term 'Mondegreen' in her essay "The Death of Lady Mondegreen," published in Harper's Magazine in November 1954:
When I was a child, my mother used to read aloud to me from Percy's Reliques, and one of my favorite poems began, as I remember:
Ye Highlands and ye Lowlands,
Oh, where hae ye been?
They hae slain the Earl O' Moray,
And Lady Mondegreen.
Wright had misheard the last line, which reads "And laid him on the Green", and 'Mondegreen' has since been available (although not much used) as a descriptor of any confusion that results from close homophonic resemblance between two distinct phrases. I've blogged about this before - when W. H. Auden mischievously suggested 'New Directions' as the name for a publishing house bacause he imagined prim schoolmarms asking bookstore assistants whether they had nude erections.
Another example of a Mondegreen is "Gladly, the cross-eyed bear" (from the line in the hymn Keep Thou My Way by Fanny Crosby and Theodore E. Perkins - "Kept by Thy tender care, gladly the cross I'll bear"). As a child I thought the mournful Jim Reeves lyric was "I love you, big horse, you understand dear...".
Coulis nos fête.
Et soif qui dites nos lignes.
A final example of Mondegreen virtuosity is a fondly-remembered 1976 comedy sketch featuring Ronnie Corbett and Ronnie Barker (The Two Ronnies). Written by Barker it's immensely popular in Britiain but may be unknown elsewhere. It's called Four Candles and, apart froma clumsy punch line, is quite a piece of work.