Deriving from the mouli grater which is a cheese grater, it was founded in a chelmsford high school in which a certain very funny student thought that a mouli grater was a retarded name for a cheese grater. Then when her cooking came out the oven all retarded she declared 'thats all moulied up now isnt it'! therefore it means 'retard' or 'retarded'
'hey look at that idiot over there!'
'HAHA what a mouli'
'*gasp* look at your quiches!'
' there all moulied up now!'