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1938, Xavier Herbert, chapter XI, in Capricornia, New York: D. Appleton-Century, published 1943, page 179:
[…] one of his eyes was wally, a condition common among the natives of the land. (Here the first meaning is intended, as indicated later in the text:) […] turned his one black eye on the kindly man […] (p. 183)
2007, www.urbandictionary.com,
You are freaking me out with your wally eye. One of your eyes is doing its own thing.