The good people at the Grammy Awards are famously out of touch (a good example was Fountains of Wayne's best new artist nomination in 2003, 7 years after the release of their first major label record), but perhaps the most infamous example surrounds the 1989 Grammy Award for Best Hard Rock/Metal Performance.
As new music genres become more mainstream, the Grammy organizers sometimes add new categories to honor music that would otherwise be overlooked. For example, Best New Age Album debuted in 1987, and Best Alternative Music Album in 1991. The Hard Rock/Metal Performance category debuted (along with Best Rap Performance) in 1989.
Of the five nominees, four can safely be called hard rock legends. AC/DC was nominated, along with Jane's Addiction, Iggy Pop, and Metallica. The fifth band, surprised to even be nominated, didn't attend the ceremony.
You see where this is going, right? When the winner was announced, it was the great English prog rock group Jethro Tull, for their album Crest of a Knave. (Track 4 from the record, "She Said She Was a Dancer," is a good example of their metal chops). It is said that the audience booed, and Metallica was still cheesed enough that three years later they were compelled to reference Tull in their acceptance speech when Grammy chose their classic self-titled record as Best Metal Performance of the year.
Tull, for their part, seemed to accept the award in good humor. Their record label Chrysalis took out the ad pictured above in a music trade journal noting that "the flute is a (heavy) metal instrument" and congratulating the band.
For a good list of Grammy silliness, this Cracked article works nicely.