Yes, the humor is in the last definition you give there. In English (at least here, can't say for the UK & Aus/NZ) "with sympathy" would typically be the way one signs a "Sympathy card" which is a card that one sends to someone who's loved one has died or who has experienced a tragedy. Given my post, your writing "with sympathy" could have three possible meanings, all of them sarcastic. One is "with sympathy" for my alma mater's basketball team having been eliminated; #2 is "with sympathy" for posting the picture that is indeed as scary as Jay's; and the third is that your "with sympathy" comment following your other comments could mean that you feel sorry for me in that it must be difficult to love myself or that it must be difficult not to love myself too much since I'm "just good".
The reason that it's "funnier than you know" is that I guessed correctly -- you meant none of the above -- you meant the first meaning you cited from your dictionary. The humor was in the irony of that. Anyhow, humor is like a couple of other things in life, once you start to disect and analyze it, it loses a lot of its "oomph".