It's "loo"! Something to do with people dumping their bedpans out the window in the olden days and shouting, "gardez l'eau!" to passing unfortunates. This soon became Anglicised into "gardy-loo".
Uhm.. rich and educated people in England often used French, in the olden days.
Your lyrics definitely have a misspelling. "Lou" is short for "Louise". :)