Tim discussing the death of his grandmother is definitely funnier than it sounds:
Tim: It was a shock. I mean I thought she was going to live till she was a hundred.
Lee: Were you close?
Tim: Well... 94, I was only six years out.
The first episode also has a couple of gems - Lee's discussion with Kate about the training course advertisment, and this:
Kate: Sensitive? This from the guy who upset my mom by calling her the happy hippo?
Lee: C'mon, she's bigger than that.
Then there's the "Aussie" episode, where Lee is employed in a shopping centre handing out leaflets - dressed as a six foot tall bird.
Lee: I've heard 'em all today. "That looks like an eggciting job." "At least it's a feather in your cap." "Are you the one that crapped on my car?!" I wouldn't have minded, but the last one I wasn't even wearing the costume.
And then later, when Kate brings it up again:
Kate: That thing about taking a doo-doo on the man's car? That was a joke, right?
Lee: Course it was. (beat) He didn't see it that way though...
Practically all of Lee's responses to Barbara about her cleaning abilities are very funny.
Barbara: This apartment doesn't clean itself, you know.
Lee: It does more than you.
Lee and Tim having to babysit Guy's Grandson (particularly once he's swallowed the subutio football).
Lucy is considering marrying an eastern european mechanic so he won't be deported to his government oppresed country, she's sat on the sofa deep in thought when Lee comes in and starts singing:
Lee: You say 'potato' , he says 'SZVZNIAK!' You say 'tomato', he says 'Funuftilak', Potato, szvzniak, tomato funuftilak, lets call the whole thing a sham.
In fact it's basically just the first line that leaves me crippled with laughter.
In the Christmas special after the third series.
Frank: The thing is - I'm dying. There, I've said it. Six months, maybe less. They say there's ways to manage the pain, but that's all they can do.
Lee: Fuck off!
In "Band", the opening episode of series 5 sees Tim joining a band. As the band, Lucy and Lee sit in a bar, the band leader starts comparing the band to the Beatles, and himself to John Lennon. When he starts flirting with Lucy, Lee makes a trademark snide remark, and we get this exchange:
Band Leader ("John Lennon"): I don't remember you introducing yourself... who are you?
Lee: Mark Chapman, pleased to meet you.''
The camping episode in series 5. All of it.
Just for the sake of description, it should be absolutely terrifying, but the entire episode manages to be one of the single most hilarious things in the series.