When I came across “Ladle Rat Rotten Hut” (when I was a teen, I think) I was fascinated. The educator H. L. Chase had written the text to prove that you could switch out similar sounding words for the familiar ones and the listener would be able to discern the original sense as though interpreting an accent. “Ladle Rat Rotten Hut” equals “Little Red Riding Hood.” (The Exploratorium has Chase’s version of the classic fairy tale on its website.) I’ve seen something like this as well when writers attempt to reproduce the sounds of a particular accent. One less radical version you might have seen (or even accidentally used) is the switching out of the contraction for “have” with the soundalike “of” as in “He should of done that already!” (instead of “He should’ve done that already.”)
I have used this homonymesque technique in my writing, poetry particularly, adding slightly hidden meanings or puns. I like to stretch the soundalike across more than one word. Chase does this, too. Here’s Red Riding Hood to the Wolf in grandmother disguise:
"O Grammar, water bag noise! A nervous sore suture anomalous prognosis!”
Let’s see if I can translate: O Grandma, what a big nose! I never saw such an enormous proboscis. I think I got that right. “Anomalous prognosis” doesn’t sound much like “enormous proboscis” to me and I had to struggle a little figuring out what Chase meant us to read. In the category of soundalike covering more than one word: "suture" stands in for "such a", "water" for "what a". You can break words up, too. "Grandma" might be written "gray maw," for instance. (If there’s an authoritative translation of "Ladle Rat" I haven’t seen it.)
It’s tricky. Push this too much and the hidden meaning is so hidden as to be absent. I often have trouble parsing Chase’s “Ladle Rat Rotten Hut” and it’s not supposed to be a big challenge.
In his memoir/essay about being young and fighting the good fight in ACT UP (the AIDS Coalition to Unleash Power) back in the late ‘80s/early ‘90s, Dale Peck writes about a bit of goofiness amid the fierce seriousness:
Byron … taught me to yell “ACT UP! Fight back! Fried eggs!” (instead of “ACT UP! Fight back! Fight AIDS!”) to relieve the monotony of two- or three-hour chants at demos: you could shout it right in cops’ faces, in reporters’; they never knew the difference.
Given that I often can’t make out the words in chants if I don’t already know what the chanters are shouting, I’m not surprised Peck heard no one puzzle over the fried eggs part. Close enough, right?