I need to know the episodes(s) where Floyd is talking to Andy (I think), and as Floyd is telling stories Andy replies, "Floyd, that's bad/terrible!". Floyd returns with, "No! That's good!", and proceed to explain why. Thanks!

This may or may not be what you're thinking of, but there's a scene in the color episode from the 6th season entitled "Opie's Job" where Opie enters the barbershop while Andy's getting a haircut and asks Floyd for a job.
Anyway, Floyd butts in the middle of a discussion between Anj and Ope and asks what happened. Anj replies, "Oh, Opie's broke his bike". Floyd responds,"Broke his bike?! Oh, that's bad."
Andy then says," Well, now ya see he's tryin' to earn a little extra money so he can pay to have it fixed." Floyd responds," Oh, well that's good." :tiphat: