'LOLed' is the past tense of LOL(laughing out loud) but does not make sense as it means 'laughing out louded'. But the person wants to say 'laughed out loud'. It is used very rarely, and is used mostly by internet dumbos, lazyasses and blondes.
I LOLed yesterday on hearing that joke. Hehe!!!! Hello? U therrr??? LOL!!!!