Craig Ferguson interview in Playboy

PLAYBOY: What was the genesis of the puppets? Did you come to work one day and say, “Puppets are funny. Let’s do something with puppets”?
FERGUSON: That has a complicated backstory. It started with a buddy of mine named Steve Jones, the guitarist with the Sex Pistols. He had a radio show in Los Angeles called Jonesy’s Jukebox, and he’d play all these records from his collection. I was driving to work one day, listening to his show, and he was playing “The Lonely Goatherd” from The Sound of Music. [sings] “High on a hill was a lonely goatherd / Lay ee odl lay ee odl lay hee hoo.” It just made me laugh. So I came to work and said, “You know what? I’m going to lip-synch that ‘Lonely Goatherd’ song on tonight’s show.” There were these hand puppets lying around the office, and we used them for the bit. That was kind of the beginning of it.

LINK
p.s. I will get round to updating playlists etc sometime soon.