So there I was, having a fantastic time going down on my nan.
When suddenly I got a nasty taste in my mouth.
"Wait a minute," I said. This distinctly tastes like horse semen.
Then it clicked.
"Ah, so that's how you died."
The joke plays on the shock value of incest and necrophilia. The narrator is initially enjoying themselves with their grandmother, but they get a strange taste. They realize the taste is horse semen and that's how their grandma died, implying that they are committing necrophilia with their dead nan and they died from having sex with a horse.