Mercedes Lackey has a series of books entitled "Tales Of The Five Hundred Kingdoms."
They are basically common fairy tales retold as fantasies and they severely twisted.
One of my favorites is "One Good Night." Don't want to spoil it, but let's just say I laughed out loud at what the dragons were really doing with the virgins.
I second the recommendation of Blue Moon Rising and Beyond the Blue Moon, By Simon R Green. Very funny without going totally campy.