On June 28, 1985, on the Sleepless Knights tour, when performing at Timberwolf Amphitheatre at Kings Island in Cincinnati Ohio, Jimmy commented on all those crazy folks in the crowd wearing Hawaiian shirts and parrot hats and who keep coming back to every show. "Just like DeadHeads," Timothy B. Schmidt (who also played Bass for the Eagles between stints with the Coral-Reefer Band) replied, "yeah, Parrot Heads!" and the rest is history.
Several Members of our Club, were part of that notorious audience at that Historic show..............

Sources:
Jimmy on Whoopi Goldberg's Show, December, 1992
Jimmy on The Arsenio Hall Show, June, 1990
Jimmy's interview on Radio Margaritaville, before Cincinnati show in Aug 22, 2005
When Jimmy is asked, about the origin of the name Parrot Head
This is Jimmy's story and he's sticking to it.
Thanks to conched, and Buffetnews, for this copy of the old article in the Coconut Telegraph, documenting the Event in Jimmy's own words
Vol. 8, No. 1 of The Coconut Telegraph.- Margaritaville Jan-

Feb 1992 Q&A By Steve Morse, Boston Globe Staff

Q. On your recent live album, you say, I've never won an award for any music that I've written, but I don't care when I have fans like the Parrot Heads."
A. Yeah, I didn't see my name come out of any envelopes this year
either... But awards are really sort of meaningless to me, especially after Milli Vanilli gets one for not singing. And what are they for? The industry or the artist? Of course, we'd all like adulation, but I get it every night from the Parrot Heads.

Q. Can you pinpoint exactly where the Parrot Head phenomenon
started?
A. "I know exactly where it started." Timothy Schmidt (Eagles bass player) was in the band, and we were playing a venue outside of Cincinnati called King's Island. It was an afternoon show. People had already started wearing Hawaiian shirts to our shows, but we looked out at this Cincinnati crowd, and they were glaringly brilliant to the point where it got your attention immediately. I went, "Look at that." Then Schmidt said to me, "They look like Deadheads in tropical suits. They're like Parrot Heads!" He yelled that to me in the middle of a song. So I immediately took the term and threw it out over the microphone. And the people identified themselves with the term from the get-go.

Q. When was that?
A. It was six or seven years ago. That's when it really started to build. I mean, we were doing good business until then, but after that, it took off. And now, on the road this year (Outpost Tour 1991), I read articles about how horrible the economy is, and I go, "Really? You couldn't tell that from here." But honestly, it gives me a great deal of satisfaction because we work really hard at this.

In 1985 Jimmy played in Cincinnati on June 28, according to the schedule printed in the Coconut Telegraph for June/July 1985,
Special tour edition