Ladies and Gentlemen,
hobos and tramps.
Cross eyed mosquitos
and bow-legged ants.
Pull up a chair,
and sit on the floor,
I'll tell you a story
you've heard before*
One bright day
in the middle of the night
two dead boys
got into a fight
they stood back to back
and faced each other
pulled out to guns
and stabbed each other
a deaf policeman heard the noise
pulled out a knife
and shot both boys
If you don't believe me
this lie is true
just ask the blind man -
he saw it too!
This one was told to me in 1990 or 91 in Iowa, and Sherman collected an identical version dating to the 1960s, but it goes back a LONG time. Like, really long. In Iona Opie's "Language and Lore of School Children" (1959), she lists the following variation:
Ladles and jellyspoons
I stand upon this speech to make a platform
the train I arrived in has not yet come
so I took a bus and walked
I come before you to stand behind you
and tell you something I know nothing about!
One fine day in the middle of the night
two dead men got up to a fight
back to back they faced each other
drew their swords and shot each other
a paralysed donkey passing by
kicked a blind man in the eye
knocked him through a nine inch wall
into a dry ditch and drowned them all.
Opie noted that this had been collected in 12 different schools around the UK, but that it had also been collected, with almost no variation, fifty years before. It was probably older than that, too. There was nursery rhyme about two dead horses running a race (with the blind spectators looking on) in 1830, and something similar was noted in the pocket book of a minstrel in 1480
I saw some headless playing at ball
and a handless man served them all
While some mouthless men lay and low
and some legless men away them drove
(My own crude translation of the 15th century English). This doesn't mean that the current rhyme is actually descended from the 15th century joke - it's important to remember that "similar to" doesn't always mean "descended from." But, heck, there's also no reason that this joke couldn't have evolved into the one on playgrounds to this day.
Again, plenty of variations go around - add the ones you heard in the comments! It had morphed into the version I heard by at least the 1970s, but even that specific version is probably a lot older than that.