Continuity mistake: When Homer bangs on the screen in the testing booth, the little sign on the top left of the glass that was there earlier is no longer there.
Continuity mistake: The house is ripped from its foundations, but later on when it falls down the waterfall you can see the floor is completely intact.
Answer: Willy referred to an encounter he believed he had with actual aliens, while Wiggum thought he was referring to the arcade game.