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UPDATE: please read the comments on this post for documentation of earlier LOL Cats, including a comment from Jason Scott. This is, sadly, not the earliest LOL Cat known to man.
Digital archivist Jason Scott (creator of BBS: The Documentary) has discovered what might be the first LOL Cat ever. He writes:
From the March 1929 issue of Parents’ Magazine, page 73. Someone might call this a LOLcat. Either way, 1920s Nursery Cat Is Watching You Parent.

Photo by Jason Scott, used via Creative Commons license:
An early one, but not the first. Last year someone found a 1905 cat postcard which has all the earmarks of LOLcats: a funny photo, and a caption below claiming to be what the cat is thinking.
http://www.mycatwearsclothes.com/2008/11/cat-in-clothes-from-1905.html
posted by Jason Scott on 12-2-2009 at 4:22 pm
1920? I call fake. That grain is way too good and uniform for the early 20′s in photography.
posted by pj on 12-2-2009 at 4:29 pm
I Can Has Cheezburger? points to this contender for Oldest LOL Cat, supposedly from 1905!:
http://icanhascheezburger.com/2008/12/01/funny-pictures-oldest-ever-lolcat-found/
posted by D.Billy on 12-2-2009 at 4:59 pm
4chan has been wreaking havoc for a long time.
posted by Jake on 12-2-2009 at 5:33 pm
Lol sweet. i can haz it?
posted by Barbara on 12-2-2009 at 6:14 pm
Harry Whittier Frees started doing this sort of thing around 1900.
http://www.neatorama.com/2007/04/19/harry-whittier-frees/
posted by Miss Cellania on 12-2-2009 at 6:58 pm
Ha, Ha, Ha, It must be so!
posted by Dan on 12-3-2009 at 1:51 am
Note: I have updated this post (and its title) to reflect Jason Scott’s historical notes, as other blogs like BoingBoing are picking it up and apparently not reading the comment thread.
posted by Chris Higgins on 12-7-2009 at 2:50 pm
The livejournal cat_macros community is having a field day with this one, making modern versions of it.
http://community.livejournal.com/cat_macros/5395235.html
posted by Adrian on 12-23-2009 at 7:48 pm