it sounds like a pig latin word (ie ‘pig’ becomes ig pay)…
thats why we (here in my little corner of the living room) liked saddams sons names so much-uday and (?) qusay… they vaguely sound like pig latin. just my…H.O.
Another one here… we´re watching you. 
As for the Homer incident; I thought it was funny. But I feel a bit depressed by the trend to only mention Uruguay when some disaster happens… 
Irkutsk, on the shore of lake Baikal, is also used that way.
I wonder how the Irkutsians (?) feel about that ?
I once saw a movie where a reporter said that he had been in Uruguay, covering an earthquake that had killed many indians !!
A) NO EARTHQUAKES, EVER!
B) NO INDIANS. NOT ONE !
A small portion of the population has a fraction of indian blood. No hard facts on it either. I once saw a documentary on a half-charruan indian, long time ago.
Hey, it could be worse. You could live on the shores of Lake Titicaca. 
Yeah, but the Timbuktusians are kicking up their heels.
Everyone knows that the Timbuktaqis are passe.
so what does the “-guay” mean in Paraguay and Uraguay? River?
Why does this root show up in the names of two South American countries? They aren’t even next to each other…
The language is guarani, which was spoken by natives of the same name. They where distibuted over a large area. There where others of course. The charrua for example where local to Uruguay only.
doing a google search I found this:
Para = sea
gua = origin
y = river
I have to deduce that “Uru” means birds