After seeing Random's comment: I think the word your friend was looking for might be Néant.
At first, and as pointed out by others, it's difficult to find a single world that can mean at the same time : "sky" and "nothing" especially when some is asked "What's up?".
Let's think. Semantically, the sky and nothing are more or less the same thing. Remove the clouds for the sky and what you see is: either a celestial body or... nothing. The fact that the sky is blue is just a matter of perception of light in the atmosphere.
"The sky" in French is literally translated into "Le ciel" but one could also use "L'espace", "L'atmosphère", "Le vide" or "Le néant" to refer to the sky.
"Nothing" in French is literally translated into "Rien" but one could also use "Vide" (which translates into "Empty" or "Emptiness" in English) or even "Néant" (which has more or less the same meaning as "Vide").
"What's up?" in French it would be something like "Quoi de nouveau ?", "Quoi de neuf ?", "Quoi de beau ?", "Ça va ?", "Comment ça va ?", "Comment vas-tu ?", "Comment te sens-tu ?", "Comment te portes-tu ?", "Es-tu en forme ?", "La forme ?" etc.
When asked "Quoi de neuf ?" a possible answer is "Néant" which is a short answer for "Le néant" and fits your condition of being synonym to "Ciel" and "Rien".
A typical pun when asked "Quoi de neuf ?" is "Que du huit." which plays with the word/number "neuf". "Que du huit." does not explicitly answer the question and could implicitly mean that there's nothing new.
An easy translation of this pun in English could be IMO :
- Quoi de neuf ? (What's up?)
- Que du huit ! (The sky!)