I make charts of songs that are good candidates, good targets, so to speak. Then I try to come up with ideas for parodies. And 99% of those ideas are horrible.
So that's why one of my rules of parody writing is that it's gotta be funny regardless of whether you know the source material. It has to work on its own merit.
One of my pet peeves is that sometimes the talents of my band get overlooked because, and it was the same problem that Frank Zappa had, with a lot of groups that use humor, people don't realize there's a lot of craft behind the comedy.
It was difficult to get into my friends' rock bands when I was a teenager. They somehow didn't see the need for an accordion player. That's when I realized that I had to find my own path in life.
I write and write and write, and then I edit it down to the parts that I think are amusing, or that help the storyline, or I'll write a notebook full of ideas of anecdotes or story points, and then I'll try and arrange them in a way that they would tell a semi-cohesive story.