select for update & lock contention

I think I'm seeing table-level lock contention in the following function
when I have many different concurrent callers, each with mutually distinct
values for $1. Is there a way to reimplement this function using
select-for-update (or equivalent) in order to get a row-level lock (and
thus less contention) while maintaining the function interface? The docs
seem to suggest so, but it's not clear how to return the SETOF queued_item
and also use select-for-update to get the row-level locks. TIA.

CREATE OR REPLACE FUNCTION getqueuedupdates (character)
RETURNS SETOF queued_item AS '
DECLARE
rows record;
BEGIN
FOR rows IN SELECT * FROM queued_item where subscriber=$1 LOOP
RETURN NEXT rows;
DELETE FROM queued_item WHERE key=rows.key;
END LOOP;
RETURN;
END;'
LANGUAGE plpgsql;