Are you sure your times are numbers?
Here's what I get...
Code:
----C----- ---D---- ---E---
1 wake up at time Average
2 5:00:00 8:00:00 7:00:00
3 9:00:00 10:00:00
4 8:00:00 3:00:00
E2 =AVERAGE(D2 : D4)
As riothecat says, if this does not help a workbook could solve any guessing...