Off the hook is actually a modernization of a series of slang words. Closely related to off the chain, there refering to something being so "fresh" and "new" that its literally right off the store shelf. (started in reference to clothes, the hangar being the hook)

cool; happening

adj.

1. exceeding the minimal standard of satisfaction.
2. appealing to one's mind

To express such demand or activity that it is beyond normal conditions.

Out of control.

Stems from: A phone ringing so much that it remains off the hook as a result. (so busy)

adj.
1. Freed, as from blame or a vexatious obligation: let me off the hook with a mild reprimand.
2. The Shiznit, something noteworthy, outstanding
3. Off the chain

Intense or out of control, but typically in a good or fascinating way. The term is derived from a boxing metaphor - when boxers train on a heavy bag they can knock the bag "off the hook". Also see "knock him out of the box" for another popular boxing metaphor.

excellent