Yes, irony and sarcasm tend to crash into the rocks of Thai literal-mindedness, particularly among the less-educated. I try not to use sarcasm at all, since it is usually perceived as plain aggression and hatefulness. Even the mildest form of irony can backfire as well. I have a good Thai friend Dton, who works in a Bangkok bar but comes to visit me in Pattaya quite often. We were sitting at Dick's Cafe in Jomtien one time and I was telling him how much he resembled a waiter there. The waiter wasn't at work that evening and I found myself exaggerating the resemblance mischievously. As we walked away after our meal I looked at Dton in mock puzzlement and said, 'Are you Dton or the waiter?' I can't believe any Westerner would have failed to realise at once that I was joking, but poor old Dton cried out in anguish, 'I am Dton!' 'I know, I know,' I had to reply tamely.
I don't mean to suggest that Thais are lacking in humour though. On the contrary, I find them to be one of the most delightfully humorous peoples in the world when it comes to appreciating life's absurdities.