@contrex,
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Yes, it's "hoist" (blown up) by his own petard (a crude form of explosive device)
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Without a doubt that is the nicest and most accurate explanation of that line. Also if you use the word 'hung' it's accurate in this form "the stockings were hung on the chimney with care", in other words items or objects are hung or you hang the items on the chimney. If the misquote used hanged, it would at least be normal usage however the actual quote used "hoist".
Modern English usage, especially spoken English can be very informal combining slang and bending nouns into verbs. Depending on the circumstances, it's important to know when informal/trendy/slang usage is acceptable, at gatherings of friends or family. And when it's not, such as applying for a position as an English professor, or during a job interview (unless of course you are trying out for the banjo spot with a Country Music Band. By the way, Kris Kristopherson was a Rhodes Scholar, and Im pretty sure he knows the difference. It's not a matter of right or wrong or good and bad, and especially not stupid versus refined. It depends on the situation you are in at the time.