What's happening: When Clifford (Martin Short) and Uncle Martin are talking about Clifford's prank at the gas station, the entire thing is being recorded by a taping device in the room.
This is the conversation we see going on:
Martin: I'm gonna punish you, and that means dinosaur world is out.
Clifford: I don't understand.
Martin: I've got a bombshell for you young man I happen to be the boss of this house and you cannot fight city hall.
The slip-up: When Clifford, comes up with a plan to get Martin back, he gets the tape that recorded the converstaion, and listens to it in his room. We clearly hear THIS conversation:
Martin:"...punish you, and that means dinosaur world is out.
Clifford: "THAT WOULD BE A MISTAKE."
Pretty big slipup if you ask me...
The movie, ears.