When someone knows to much sauc and is on the verge of exploding ultimately exposing all of the sauc. Also can be used when someone gets their sauc intertwined or if someone is clueless, delirious, stupid or doesn't know what they are doing.
"What was brittany doing last night?"
"I don't know man, I guess she was lost in the sauce."
"Oh my god! Mr.Fina was lost in the sauce during math today."
"Bethany keeps mixing up her stories, ugh she must be lost in the sauce"