The War of the Simpsons - S2-E20
Revealing mistake: When Ned says "Crème de cassis" while describing what was in the drink he made. There are several animation errors in this shot. His head is disconnected from his body, and his nose disappears. Also, a part of his face is missing between his fingers while he does the 'OK' hand gesture.
Answer: Willy referred to an encounter he believed he had with actual aliens, while Wiggum thought he was referring to the arcade game.