Lyric discussion by cvantez 

Cover art for Asking Price lyrics by Stephen Malkmus and the Jicks

The nerdy musician in me wants it to be, "This is the story of a man gone sad/Trapped inside a Kaoss Pad," just because that device has distortion (among other effects) in it, which is a nice lead into the next lines about the distortion. But this could very well just be wishful thinking on my part.

He absolutely said Kaoss Pad. Stephen Malkmus is a nerdy musician too, y'know.

He clearly says "pad" and not "tag" (and pad makes sense in the rhyme scheme; tag doesn't). So I'm sure you're right about the Kaoss too.