I've never come across someone who knew what that line was

Aye to that one, xara!
It's one of those "Chinese Whispers" songs, isn't it?

Personally I'd thought the line was
Wrapped up like a blue Sherona in the night

- which must mean that I first heard it after My Sherona
(which has been discussed on another thread, with amusing results, if anyone's interested:
http://wordsmith.org/board/showthreaded.pl?Board=miscellany&Number=6311)

Everything ties up!