The act of having sex with a women in her tracheotomy hole. In this context, the tracheotomy was due to long term smoking, hence the frog (deep raspy voice) like moans that come from the act.
"Dude, you Sherri down the street? I totally gave her the dirty kermit last night."
The act of leapfrog (hence the name "kermits" with 2 or more men. In the process of this the person who is jumping over the next sticks his penis into to nexts persons butthole or simply let's it slide along the crack. It is then reapeated until the men realize how frickin nasty this is.
Hey I heard you and joe were doing dirty kermits last night.