Maybe it's the right-wing haste to ridicule and condemn Obama's Nobel Peace Prize that caused Drudge to make such a sloppy error.
On the Drudge site, one of the many Nobel-related headlines reads:
MIXED REVIEWS; 'EMBARRASSING JOKE'
Boy, that sounds bad for Obama. But when readers click on the link, it takes them to a Reuters article about Obama's prize, and the "embarrassing joke" quote is nowhere to be found in the article. In fact, the words "embarrassing" and "joke" never appear in the linked report.
UPDATED: Drudge is now linking to a much longer version of that Reuters article, which includes the "embarrassing joke" quote from a member the conservative religious party in Pakistan,