There is no definitive story of the first wet willy with many varying stories. However the one that has been widely accepted by many historians is the tale of William Paters.
Paters was a school boy in the early 18th century. It's said that his friend, Bill Bobbins had fallen asleep in Paters company. At this point he decided to take advantage of his unconscious friend. He attempted to stick his cock in Bobbins' ear. Bobbins awoke before Pater had committed the act and in a wild moment of terror and revulsion clocked Pater with a solid right hook. Pater was knocked unconscious and Bobbins fled.
A passing police officer by the name of Wetley Williams stumbled across Paters prone body. Instinctively he attempted to revive the boy and falling back on now outdated medical techniques he moistened his finger and inserted into Paters ear.
Paters awoke swinging his fists violently in disgust and confusion. Since that day this technique has remained in the Metropolitan police field manual, next to the correct method of beating up hippies and students.
So that's the wet willy. Next up, the Chinese burn.