The word means "eggs," but the reference to "balls" is so strong that you have to watch out using the word at all. Polite girls would probably order blanquillos (little white things) from a male waiter.
To be out of order or reversed; very confused or mixed up; completely fouled up or wrong.
'Ass' refers to the rear end or buttocks, and 'backwards' means reversed. The phrase suggests that something is happening the wrong way, with the rear coming first. ('Ass' is an impolite word, so be careful using this phrase.)