Can anybody provide me with a funny nostalgic short story? I want a funny story which contains figures of speech like hyperbole, euphemisms and puns.

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Garrison Keillor almost exclusively writes nostaligic humor pieces.  Any chapter from Lake Wobegon Days, or Wobegon Boy, would probably fit your needs.

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I am not sure if it completely fits the bill, but the first thing I thought of was "The Landlady" by Roald Dahl.  It is a bit nostalgic, and definitely full of tongue-in-cheek wry, morbid humor.  It is about a man who goes to stay at a boarding house and discovers that the landlady is a bit odd.  For example, she likes to stuff things.  My students love it!

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Your question immediately reminded me of some of the stories by James Thurber, who was one of America's greatest humorists. He wrote a number of nostalgic short stories about his boyhood in Columbus, Ohio. He and E. B. White, best remembered as author of "Charlotte's Web" and "Stuart Little," were two of the major contributors to The New Yorker from the time it was inaugurated by Harold Ross. Many of Thurber's nostaltic stories were published in his anthology titledThe Thurber Carnival.  Among them, the one that seems to fit your requirements best is "The Night the Ghost Got In." I have provided an eNotes link to the coverage of this story below. There is an abundance of information on "The Night the Ghost Got In" in eNotes, including a study guide. Thurber uses a great deal of hyperbole for the sake of humor. Another excellent nostalgic story which I'm sure you would enjoy reading, if you haven't already, is "The Dog That Bit People." It was also published in The Thurber Carnival. 

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