You mixed up the opening lines and missed a couple out there, Skipper. The scene is after the Dukes go past Rosco's road block while towing the Richard Petty race car. Cooter is in the race car. This is how it should begin:
Bo: "Hang loose."
Luke: "If I was any looser, I'd be sliding off the seat."
Balladeer: "There was old Cooter, sticking out like a bourbon bottle at a country revival."
Luke: "Watch out for the mailbox."
Bo: "What mailbox?"
Balladeer: "Meanwhile, old Rosco wasn't doing too hot..."