I don't read moonspeak, but I'm pretty sure the sign you posted doesn't say "Katawa" -- but rather a more "politically correct" version. It's just an ironic twist that they decided to translate into something fairly offensive in English.
I think the core issue is that the sign is in Chinese rather than Japanese.
<Aura> would you squeeze a warm PVC bottle between your thighs and call it "manaka-chan"
<Suriko> I would do it if it wouldn't be so hard to explain to my parents
Well, with a language like Japanese, a lot of words don't translate exactly into English words. Katawa could be a word that encompasses all of the different English translations into one word. The basic concept is the same, and can be translated to something close to what the meaning is, but not exactly.
It's a good thing Shizune is deaf, she is the only one who can stand (not) hearing "Wahaha~!" over and over.
I don't think King of the Hill has ever discussed anime, especially not Gundam and Lucky Star. That was just some anon being clever.
Wikiquote wrote:Hank meets Kahn for the first time.
Hank Hill: So are you Chinese or Japanese?
Minh Souphanousinphone: No, we are Laotian.
Bill Dauterive: The ocean? What ocean?
Kahn Souphanousinphone: From Laos, stupid! It's a landlocked country in South East Asia between Vietnam and Thailand, population approximately 4.7 million!
Hank ponders this for a few seconds.
Hank Hill: So are you Chinese or Japanese?
Khan Souphanousinphone:: D'oh!
...
Let's discuss American ignorance towards East Asian culture!
Let's discuss American ignorance towards East Asian culture!
Classmate: Konichiwa.
Me: What?
Classmate: Is that how you say it?
Me: I'm not Japanese.
Classmate: Oh, sorry.
A few months later while talking with someone else...
Classmate: What ethnicity are you anyway?
Me: I'm Filipino.
Classmate: Is that a city in japan or something?
There were only like 2 or 3 Asian people(including me) in the school that year so I got stuff like that a lot.