Holy crap…you literally just unlocked that same memory for me. Idk what episode it was either, but I totally remember that part.

Edit: Found it! It’s the episode “Gary Takes a Bath” Season 2 Episode 13.

At one point, Spongebob attempts to hypnotize Gary into taking a bath, and one of the telepathic images is that weird hillbilly girl laughing.

The clip from that episode

this might be tricky, the overly detailed illustrations of messed up looking characters was a pretty common bit on the show