Groundskeeper Willie: Yeah, I bought your mutt, and I 'ate him. I 'ate his little face. I 'ate his guts. And I 'ate the way he's always barking, so I gave him to the church.
Bart: Oh, I see. You hate him, so you gave him to the church.
Groundskeeper Willie: Aye, I also 'ate the mess he left on me rug.
Comic Book Store Owner: Now make like my pants and split!
Answer: Willy referred to an encounter he believed he had with actual aliens, while Wiggum thought he was referring to the arcade game.