"Used to refer to something unbearably stupid or ludicrous, usually in the form of "object of scorn iz pastede on yey!" (The deliberate misspellings are half the point of the joke.)"
Ultimately this derives from the JournalFen-based FandomWank community, which exists to mock the stupid in various fandoms. The original story involves Lord Of The Rings fangirl Crystal Gamgee, who perpetuated her false reputation for knowing the actors well enough to make sketches of them - sketches which were forgeries using borrowed photos and obvious Photoshop filters. In the course of her self-defense, she displayed an obvious photomanip of LOTR actor Dominic Monaghan supposedly lying on her bed. Thus, the original reference ("My hed iz pastede on yay!") indicated general lack of A) credibility and B) skillz. "Yay" in the original has mutated into "yey" in later fannish use.