I think that tone was originally accomplished with a Roland AP-7 Jet Phaser. It had a wide range of phase, flange, and distortion settings. It was a really cool, but a little over the top. I bought one new around 1980. Used it for a few years until the novelty wore off, and then gave it to my sound man. I've regretted giving it away ever since. They go for hundreds now on eBay,
So, I've never tried to emulate the tone in That Lady, but I have mostly reproduced the jet flanging effect from the AP-7 using a phaser block (I will have to check on the details). You can hear this effect, used liberally, on the Derringer Live album. It's a novelty, but cool. I would bet that you can dial the That Lady tone, but I think you will have to use a phase block along with either an amp or a drive that can produce that nasty distortion. The AP-7 featured both modulation and distortion.
