Mocho was a Spanish word that meant maimed or referred to something that had been lopped off like a stump. To call Homer el mocho was, essentially, to call him "Stumpy" or "the maimed one." It doesn't sound particularly flattering, but among Spanish speakers the giving of nicknames is tantamount to a declaration of love. Things that would sound insulting outright in English were tokens of deep affection when said in Spanish.
