A combination of "pun" (a play on words) and "confounded" (an expression of confusion).

Thus, "punfounded" means to be confused with a pun.

This term is limited to describing confusion with puns only.
Al: "What's brown and sticky?"

Yang: "What?"

Al: "A stick!"

Yang: "I'm so punfounded"
by AlanG-LeAngryBirds December 16, 2012
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