According to the book MGM: Hollywood's Greatest Backlot this episode was filmed in the "saucer tank" on the old MGM lot, which was used by Lorimar when Perfect Strangers was in production. The saucer tank was used for Esther WIlliams as well as Tarzan movies and was torn down in the early 2000's. This tank allowed for the "flooded basement" effect of this episode.
Larry: Let's listen to dad, Balki. He taught me everything I know about plumbing.
Balki: That's what worries me.
This episode's title is the same name of the classic '50s TV show.