Serpent Of The Evil River / The Transplant - S2-E9
Trivia: When the computer is telling Courage about the giant kangaroo monster, the chicken it steps on looks just like the alien chicken from the very first episode of the show. It even has red eyes.
Chosen answer: The episode you are referring to is the finale to Season 1, "The Great Fusilli. The episode description is nearly identical to your description. However, I have not been able to find any source of this being a parody. Perhaps this episode was just an original?
MooCow