The reader usually starts to parse this as an ordinary active intransitive sentence, but stumbles when reaching the word "fell." At this point, the reader is forced to backtrack and look for other possible structures. It may take some rereading to realize that "raced past the barn" is in fact a reduced relative clause with a passive participle, implying that "fell" is the main verb. The correct reading is then:
This sentence can be parsed in other ways as well, but that is irrelevant to its status as a garden path sentence.
The example hinges on the ambiguity of the lexical category of the word "raced": it can be either a past-tense verb or a passive participle. Compare with a sentence of the same structure but without lexical ambiguity:
This example's status as a garden-path sentence consists in readers' or hearers' experience of pursuing one obvious-seeming parse, only to discover that it leads to an unsatisfactory (in this case an ungrammatical) result, then mentally returning (so to speak) to an earlier point in the structure and achieving a correct parse by different means. The point is not that people cannot understand it correctly the first time they hear it—that actually is possible—but rather that they so often do not do so, and so experience a double-take.
Other examples of garden path sentences are:
A number of jokes depend on the garden path effect, often combined with more usual syntactic ambiguity. For instance, "Time flies like an arrow. Fruit flies like a banana." The first sentence starts the hearer firmly down the garden path, priming for a particular parsing of the second sentence which would parallel the first. The joke hinges on the ambiguities of "fruit" (independent noun or modifier of "flies"), "flies" (singular verb or plural noun), and "like" (preposition or plural verb). Unlike the above-cited sentences, however, the expected reading of the second sentence ("A piece of fruit flies through the air the same way a banana does") is grammatically possible, though silly.
What has four wheels and flies? (The answer, "a garbage truck", makes little sense until one realizes that "flies" is a noun referring to the insect rather than a verb indicating what the garbage truck does. "What has flies and four wheels?" resolves the ambiguity.)
Perhaps the best known joke of this type is, "I see, said the blind man, as he picked up his hammer and saw." This sentence could be interpreted several ways: either that the blind man is acknowledging that he understands something, while picking up his tools, a hammer and a saw - or that the blind man is somehow suddenly given the ability to visually see, after picking up his hammer. In the first interpretation, the word "saw" is a noun, while in the second, it is a verb.