Peppermint, I think you may not be aware of the slang phrase 'get loose' but it is a phrase on its own, separated from the phrase 'get lost.'
'Get loose' is a slang way of saying 'have fun'. This comes from the other slang which people say 'loosen up.' When someone is irritated or not enjoying themselves when they should be, people say 'loosen up!' And so from this came the other variation 'get loose!' Which is mostly a thing that is shouted at parties before people take shots and drink alcohol. It is not often said before 'sensible' enjoyments, but rather the crazy kind. So more accurately, it means similar to 'Let's go crazy!'