The infamous cocoa puff incident has been mentioned a few times throughout the series.
When Ray was a child, the cocoa puffs cereal smelled good, so he began shoving them up his nose. He ended up shoving 25 of them up there and had to be taken to the hospital.
To get them out, he had to "crunch and blow". He had to squeeze his nose to "crunch" the cocoa puffs into crumbs, and then "blow" the crumbs out.
This incident was first mentioned in Season 1, Episode 9 "Win, Lose or Draw".