Our local newspaper had the headline today "Gadhafi forces retreat" and I read it with "retreat" as the verb instead of "forces" as the verb. I know it is a poorly written headline, but which way is the more common way to read it? (In other words, is it likely that no-one at the newspaper noticed the ambiguity?)
This is a type of ambiguous headline known as a crash blossom. From the Wikipedia link:
Newspaper headlines are written in a telegraphic style (headlinese) which often omits the copula and therefore lends itself to syntactic ambiguity, usually of the garden path type. The name 'crash blossoms' was proposed for these ambiguous headlines by Dan Bloom and Mike O'Connell in the Testy Copy Editors discussion group in August 2009 based on a headline "Violinist linked to JAL crash blossoms". The Columbia Journalism Review regularly reprints such headlines in its "The Lower case" column, and has collected them in the anthologies Squad helps dog bite victim and Red Tape Holds Up New Bridge.
One of my favorites from the list there is
The British left waffles on Falklands (Did the British leave waffles behind, or was there waffling by the British Left?)
As others have mentioned, the meaning is ambiguous without further context.
There seems to be a broad assumption here that media headlines are intended to be unambiguous. Headlines are designed to catch your eye. Full stop. Ambiguity is a frequently used tool by editors to achieve this purpose. In this case, the reader may be motivated to find out who is actually retreating.
Headlines are often poorly written, whether due to a lack of space or human error. However, as with most types of writing, there is a very specific purpose to a headline that should be considered in any evaluation.
This could be a poorly written headline, or it could be a masterful headline. Only the editor knows for sure :)
I think the editors never noticed the ambiguity. (It's possible they did but didn't care about it since headlines don't follow normal grammar.) Usually the intended structure would have an adjective as the first word, as "Libyan forces retreat", but here they didn't have an adjectival form, so the noun got used, leading to the ambiguity.