To my surprise, after some research I found a strong link between the "hotta imo" phrase and John Manjiro, Japan's first "exchange student" to America.
John Manjiro was a Japanese fisherman who, along with his four brothers, was ship wrecked on a pacific island and rescued by a passing American whaling ship. After being carried to Honolulu (Dec 17, 1850), Manjiro stayed aboard his rescuer's ship and later learnt English, navigation and whaling skills (ref: http://en.wikipedia.org/wiki/Nakahama_Manjir%C5%8D). He later returned to Japan and became the English translator & advisor to the Shogun on foreign matters.
Manjiro apparently wrote a book called 「英語練習帳」which used the "hotta imo iji-ru na" approach to transliterating English into Japanese (ref: 「日本語「らしさ」の言語学」 "Nihongo rashisa no gogengaku", Kodansha p254)**
Coincidentally, I found some other "sound alike" sayings I'd like to share:
- 問題ない 【mondai nai】no problem >> monday
- カッパ亭 【kappa tei】 Kappa Pavilion
(sushi chain) >> cuppa tea
【agedoufu】deep fried tofu >> I get
- どう致しまして 【douitashimashite】you're
welcome >> don't touch my moustache!
- 犬寝る 【ken neru】dogs sleep >> kennel
- 前代未聞 【zendai mimon】never heard of
before >> Then Die, Me moan!
- 斉藤寝具【saitou shingu】Saito Bedding >>
- 危ない 【abunai】dangerous >>
have an eye!
- 坊や【bouya】boy >> boy
** I found this reference to the book: http://kotobakai.seesaa.net/article/8173641.html