Years ago (from the date of the column, I guess it was about eight) I read ‘Walken in LA’ - http://www.theonion.com/onion3011/walkeninla.html- on another web site and for the longest time I just couldn’t figure out where the hell it came from and whether Walken (my crush at the time) was in on the joke. All I knew was that someone, somewhere, perhaps on drugs, thought it would be hilarious to portray him as a hot dog loving psychopath. Well, I guess it kind of is…
On a related note, a couple of years ago the main newspaper of Beijing, China, reported as true an Onion story about how the US Congress was threatening to go on strike because they wanted the government to build them a new capitol building, complete with retractable dome.
I saw this segment, too. It was indeed in the G Block of Fox Report, and it was clearly intended as a joke, to be appreciated chiefly by Onion readers (it was preceded by a story about the Onion). The fact that many/most viewers would be fooled by the story was part of the joke.
I can’t believe people watch FoxNews and not think they’re being fooled!
On a related note, the Chinese reported as true an Onion article about the US Congress …
What? What?
Oh… Never mind. 
Perhaps not coincidentally, Wired News has a piece on The Onion.
Onion Taken Seriously, Film at 11
Apr. 14, 2004
http://www.wired.com/news/culture/0,1284,63048,00.html