Thirty Minutes Over Tokyo - S10-E23
Trivia: During the flight to Japan, Marge reminds Homer that he had seen the Japanese movie "Rashomon" and had liked it, to which he responds something like "I don't remember it like that". This is a reference to that very movie, in which a number of people witnessed a murder and each gave a very different version of the events after what each "remembered".
Answer: Willy referred to an encounter he believed he had with actual aliens, while Wiggum thought he was referring to the arcade game.