In this sense, "ishq" represents anything that an object/idea could possibly be compared to. Thus, the phrase "cool as ishq" means that something is cooler than anything and everything - essentially, it's a less retarded way of saying "that's the coolest."
Phrase originated in Santa Barbara, and soon spread to other regions of California.
"You're watching Thundercats? That's cool as ishq!"
"Canada is cool as ishq."
"Yo, I really liked that dance you did. Shit was cool as ishq."