His listeners enjoyed his ____ wit but his victims often _____ at its satire.

The sentence intends to convey that the person's listeners (or fans) enjoyed his wit but his victims hated the same. 
Lugubrious means sad. Trenchant means incisive. 
Among lugubrious, bitter and trenchant, trenchant is a better word. 

The word that fills the second blank should mean that his victims did not like the satire.
'Wince' is the correct term to be used in this context. 

The person discussed makes incisive comments. Though people enjoy it, the victims hate the same. Therefore, option D is the right answer.