"Hot Diggity ..."

Solution 1:

It's a conglomeration of excitement [hot diggity], disbelief/disgust [daggone], and "Well you don't say?"[sh** fire and save matches]. Another similar (made up), and idiosyncratic construction:

Zam a lama durn dang Sh** fire and save the baby!

It is likely highly regional (perhaps to the point of inside his own head).

Solution 2:

Well, Wikipedia has this to say:

The phrase "hot diggity dog!" dates to at least 1928, when Al Jolson was recorded saying "Hot diggity dog! Hot kitty! Hot pussycat! Didn't I tell you you'd love it?" after a performance of the tune "There's A Rainbow Around My Shoulder".

There was also a song from 1956 called "Hot Diggity (Dog Ziggity Boom)" (same article).