Petergeist - S4-E26
Other mistake: The Griffins' house disappears when they flee, but when they go to Quagmire's house after, you can see their house when they are at the front door. Quagmire's house is on the right of theirs and the angle of the shot is to the left so it's definitely their house, not Quagmire's other neighbours on his right. (00:16:36)
Chosen answer: It's a real song called "Elvira". Originally by Dallas Fraizer in '66, however, this version seems to be the Oak Ridge Boys cover version. However, the mega lesbians skip the verse and just sing the chorus after the opening line.
Bishop73