It's not "grammatically correct" because it's missing the verb. But yes, native speakers love to squish up and stretch the language (I think that may apply to any language?). It's fun!
There's no "perfect" pronunciation of this - the speaker's accent always takes over.
Couple of tips with using this: first, use it only with friends (like Joey! ha), and ONLY if they've used the same phrase already, or in the past. Second, realise that often this phrase (plus a lot of slang) is said jokingly - the assumption being that you do know the proper grammar, of course. ;)