Tree House of Horror XI - S12-E1
Homer: Did you see that? I did the deed. Open up.
St. Peter: Oh, I'm sorry. I wasn't looking.
Homer: Hey, I thought you guys could see everything.
St. Peter: No, you're thinking of Santa Claus.
Homer: Well I'll be damned.
St. Peter: I'm afraid so, yes. [Drops Homer into Hell.]
Answer: Willy referred to an encounter he believed he had with actual aliens, while Wiggum thought he was referring to the arcade game.