People sure do say would of. They even separate the words enough to make it clear, like you or I would separate would and have when we don't want to abbreviate
My dictionary doesn't think so, heh. Webster seems to say "chiefly Northwestern US" so that may explain it. I remember rolling my eyes and thinking that it sounded like something a self-important jackass would say. (edit: the first time I heard it, I mean).
I don't think I'd ever use it, but I also don't see it as weird or wrong anymore. Melty is fine. Slippy still grates on me a bit, but I can let it slide.