additional to the previous definitions: australia (and new zealand) are sheep-farming countries and our populations are familiar with many of the aspects of farming livestock. a "dag" or "dags" is the colloquial term for the dung which collects and mats into the fleece immediately surrounding a sheep's anus; it hangs in dried-out dangling clumps which make a sound when the sheep runs, hence the phrase "rattle your dags". a sheep should be "ring crutched" to avoid or relieve this condition: crutching is the removal by shearing of all fleece surrounding the genitals usually in a circular shape or ring. a sheep not cared for properly in this way will otherwise collect dags - hence the possible connection to insults concerning fashion and appearance. the sight of a daggy sheep is unattractive and comical, although the mats of contaminated fleece may be painful and usually attract blowflies and other pests; and therefore to call someone "daggy" is to liken them directly to a neglected sheep's anal region suffering from this condition.
oh gross that outfit makes you look totally daggy - take it off quick!
This actually refers to farming... A dag is what happens when a sheep (or any farm animal with long hair) craps and the crap gets stuck in the hair, thus forming a dag.
To call someone Daggy, is to call them dirty/messy/hair full of crap.
May also come from the Tasmanian sheepfarming term 'to dag the hogget', i.e. to remove the testacles of a sheep by biting open the scrotum and sucking them out of the sack. After a day of this gruelling work one would be left covered in sheep's blood and faeces, leaving the person 'daggy'. See Errol Flynn's autobiography 'My Wicked Wicked Ways' for a graphic description of this practice.
My face and neck were covered in sheep crap after a hard afternoon of dagging the hogget. I was totally daggy.
One who unintentionaly, through stupidity, thwarts the efforts of himself or his group.
John: Theres a warthog comin' in the base.
Tom: I'll get it, I got rockets!
BOOM!
Console: Betrayal, Betrayal, Suicide.
John: Ugh! You're such a Daggy!