A portmanteau of the words "vagina" and "Rapunzel", a fairy tale princess known for her extremely long hair. A vagpunzel is a girl who has extremely long pubic hair, perhaps long enough so as to be used for climbing short distances. It can also refer to the immensely hairy vagina itself.
"With how hairy her arms are, you know she's got to be a vagpunzel."
"Of course she is. I think I saw some of her bush peeking out of the bottom of her jeans."