The episode Man's Best Friend, largely narrated by King the dog, has a hilarious scene in which King tries to narrate/reconstruct a scene he wasn't present for:
King:(narrating) From as near as I have been able to reconstruct the encounter within the shop, it must have happened something like this: *Ringing bell signals that Jack has entered the shop* Jack: Hello. Would some or all of you gentlemen like to hit me in the face? Stereotypical pirate: Arr, get him, me hearties!! *Pirates begin beating up Jack*
The final episode of Season 6, The Sky's The Limit, is pretty much a Crowning Episode Of Funny, as it includes Jack, Trixie and Freddy all applying quite a bit of Self-Serving Memory to the case they're narrating. Jack seems to stick most closely to the truth, but Trixie lets the others go through a bit of Character Exaggeration (most noticably Sabien, who in her narrative is only capable of talking in growls and screams) and Freddy turns himself into a brilliant, sophisticated Sherlock Holmes style genius with Jack as his dimwitted assistant.
It all culiminates towards the end, when Jack and Freddy, having located the lost will they've spent the episode chasing, find themselves at gunpoint by the villain, Pete "The Pirate," with no hope of escape or rescue — and then they suddenly and mysteriously suffer from a weird memory loss as to how they did escape. After first running through scenes where they are rescued by Trixie and Alice (neither of whom were actually present), and Sabien recalls that the same building they were trapped in burned down around that time, Jack and Freddy agree on this version of events:
Pete:(stilted, wooden acting) I am overcome with remorse for the way that I have treated you gentlemen. Jack: Think nothing of it, Pete, old chum. Pete: Also, my handling of this matter of the will... *theatrical sigh* I have been a first-class heel. Freddy: You mustn't blame yourself. Pete: No, no, please — take the will. Now, if you will excuse me, I will ease my pain by being careless with matches. Good day.