Even if she said it, it had no sexual innuendos.
I could be wrong, but I thought the whole point of the 'Thats what SHE said!' comment is that your taking something completely not sexual and twisting it so that it is sexual just because it could be sexual in a different context.
Which when you say 'Thats what SHE said!' means everyone's brain pauses and tries to figure out how it could be sexual, so your putting thoughts and images into peoples heads that weren't there previously and that they didn't really want there, but now there there, proably forever :*)
So...
And now you're out.
could create an image of the prostitue Codys trying to convince to play D&D saying 'And now you're out.' because his penis is to small to stay in...
-Scott
**modified to include 'images' into second paragraph.