"What Stephen calls "The ballad of joking Jesus" is an only slightly retouched excerpt of a poem written by Oliver Gogarty, called The Song of the Cheerful (but slightly sarcastic) Jesus. Joyce's small revisions make the poem still funnier.

Gogarty apparently wrote his poem only after Joyce had moved out of the tower. He sent it to Joyce for Christmas 1904, and Ellmann speculates that his gift was meant as a peace offering after their fall break-up. Joyce reciprocated the sentiment, it would seem, when he took parts of this satirical poem and put them in Mulligan's mouth on the morning of June 16, forming the comical high point of Telemachus. Ellmann reproduces Gogarty's poem in its entirety (206), making it easy to judge how Joyce presented it. 

In Telemachus, Mulligan recites stanzas 1, 2, and 9 of the poem’s nine quatrains, the last of these being somewhat revised from the original. Of these editorial choices, it may be said that Joyce represented Gogarty at his best. Stanzas 1, 2, and 9 are by far the funniest, and where 9 is uninspired (“Goodbye, now, goodbye, you are sure to be fed / You will come on My Grave when I rise from the dead”) Joyce did a very creditable job of improving it (“Goodbye, now, goodbye. Write down all I said / And tell Tom, Dick and Harry I rose from the dead”).

He also identified two good lines in stanza 3 and, rather than leave them out, found an occasion to use them later in the book. In Circe, King Edward VII appears “in the garb and with the halo of Joking Jesus” and speaks these lines verbatim: “My methods are new and are causing surprise. To make the blind see I throw dust in their eyes.”

Gogarty published six books of poetry later in his life, including exactly none of his bawdy and irreverent verses like Jesus. He gained some repute as a great poet, mostly undeserved, when W. B. Yeats selected a large number of his lyrics for the Oxford Book of Modern Verse 1892-1935 (1936) and gave him high praise in the introduction. Jesus displays real comic genius but is markedly uneven; in editing it for inclusion in Ulysses, Joyce displays a greater gift, or at least a Creative Writing professor’s better judgment when confronting uneven student work."

Source: joyceproject.com