Not a Mondegreen as such (more a deliberate change made in lyrics to sound funny or suggestive) from "The Lakes of Pontchartrain"):

If it wasn't for alligators, I'd sleep out in the nude

or from "The Wild Rover"

I went to an alehouse, I used to frequent
And I told the Landlady the Barman was Bent

or from "Lucille"

You picked a fine team to leave me, Lucille
With two hungry children, to take a Crap in the Field

I am sure "As Shepherds washed their socks by night" was just a joke, though I doubt if Norma Waterson was the originator; I remember hearing a version which went:

As Shepherds washed their socks by night
They had on I.T.V.
The Angel of the Lord came down
And switched to B.B.C.

(This dates from the time there were only 2 channels in Britain, BBC and ITV). Now there are hundreds of channels (but very few programmes worth watching).