The literal definition for ass-cheese is the sweaty, smelly grime that can be found between the butt cheeks of an unwashed crack, more often found at the very beginnings of the cavity just below the rump.
Other definitions include the use of the word describing things and/or situations equally foul or smelly.
Ass-cheese can be used in replacement of similar words that describe things and conditions that are unfavorable.
'MAN!! This bathroom smells like ass-cheese!!'
'This sucks worse than the time I was drunk and licked your ass-cheese!!'
'This burger tastes like ass-cheese!!'