I've watched the extended version of that video. There is no way that he didn't mean to say that. If you look at the video you hear a couple short chuckles and a bunch of gasps. The girl behind him to the right (his left) suddenly looks very uncomfortable standing there.
If he didn't mean to say that, he would have corrected himself immediately after he saw that reaction. Nope, he meant that exactly how he said it.
Not if he thought her reaction was at his insult of Pres Bush.