Oh, that's where it comes from!
My dad told me something close when I was a kid, but according to him it was the early EU doing dictionary translation between English and French and getting "water sheep". I never could find it.
Through an unrelated anecdote, in my head this is now bound to the music of "smoke on the water", with a sheep impression for the guitar (bass?) — "Sheep on the water, ba baa baaah, ba ba ba baaah"
My favourite example of troubled blind translation is still "naked conductor runs under the carriage".