It's an interesting concept we're getting to here! The idea that wit, sarcasm, irony etc can be used musically actually makes sense to me.
While it's true, there's never a true semiotic meaning found in music, using music to convey humour or sarcasm can be quite effective.
For me, as an improvisor, humour and sarcasm and whatnot will often come out spontaneously, in reaction to things happening in the moment (like matching tones with a police siren, or taking a rhythmic motif from some dropped silverware). Sarcasm in the moment can come stylistically - repeating a particularly lame phrase or borrowing uncharacteristic styles from another soloist; playing purposefully "old-fashioned" over bebop changes, quoting "Stella" for the drunk guy who keeps yelling "Play Stella!".
Compositionally, it's interesting when music is used ... humorously. Incorrectly. Sarcastically, ironically...whatever.
For example (clearly showing my bias, here), Carla Bley's use of Patriotic themes, and National Anthems.
See Excerpt 04, Spangled Banner Minor, and then Excerpt 02, National Anthem. (from a much larger work, full of slightly warped takes on patriotic American music.
The first was "...written during the late seventies to express some disappointment or other with the United States government.". Which is pretty clear - the purposeful mangling and destruction of the theme. The second, less ironic and dark, but certainly with Carla's classic tongue-in-cheek humour.
Things like "a fragment called Flags (which was just an inversion of the first eight bars of The Star Spangled Banner)" continue the concept of twisting something familiar, into something unique, and meaningful - in a new way.
Anyway...whatever.
If you want to hear the whole tunes, let me know. My brief thoughts and hasty excerpts don't do a major extended work like National Anthem justice ;)
R