Wow that's like choosing a fave song by one's fave artist or a fave Muppet ... so many classics to choose from.
But there are three that come to the top of my mind as the best of the best:
Sax & Violence - not only do you get Mahna Mahna doing his typical thing of infusing his unique hip vision into a musical number (as he also does in Mahna Mahna and Wild String Quartet) but everything in this bit is just top-notch...the music, the concept, the Zoot/Nigel dialogue at the beginning, but what REALLY makes it the gem it is is the puppetry! The physical interplay and reactions all throughout is wildly hilarious - this piece is essentially "puppet mime" once the music starts and the performers are at the top of their game.
"Do Re Me" - just total Muppet goofiness and another example of the entire team working together with their own characters creating a comedic tapestry. It's amazing what the simplist concept can do when performed and directed with top-notch pros...everything from how the whole piece just starts up right away with no introduction to everyone (except Kermit) finally singing together having fun at the end while Kermit screams "you're ruining the whole song!"
The opening/closing theme of Loretta Lynn episode. So brilliantly awful. So horrible it's wonderful! The music is terrifically off-key and tempo, the cheesy Fozzie-painted Muppet Show logo, Kermit having to call out "music!" - everyone totally confused but plowing forward with that show-must-go-on attitude, the thrill of seeing different more obscure characters doing the kicklines, Beaker looking more confused/worried than usual in the last verse (plus more obscure characters thrown in that shot like the jug band and Crazy Harry (and yeah, i know Crazy Harry's in the standard opening but barely visible). This is the moment i always come back to when i want to demonstrate how wild Muppet humor is.