According to legend, Morgan la Fay was King Arthur's sorceress half-sister. In Italian, her name is Fata Morgana, which is also the name given to a special mirage observed in the Strait of Messina.
A mirage is an optical phenomenon, but a mondegreen is when the ear hears (aural phenomenon) a certain lyric in a song, and due to near homophone, yields thus a new meaning.
Although "Donuts make my brown eyes blue." is humorous, I always appreciate "There's a bathroom on the right".