I figured you'd pronounce it like that. Can't really blame you.
Pew-al-up. It's a Native American word. My mom grew up there and my grandparents still live there.
That's cool, a former coworker of mine moved to Bonney Lake and I went there to visit back in 2006, so I am slightly familiar with the area.
Yeah, we have plenty of Native American towns that confuse the outsiders with their pronunciation and spelling. Ronkonkoma, Hauppauge (when my college friend was telling me about his "Haw-po-jay" video capture card I just cracked up), Nissequogue, Sagaponack, Massapequa, etc.