Used to describe a very painful, (and sometimes embarrassing), situation that one cannot get out of immediately.
This could imply financial, social (where one gets mocked and doesn't have a come back) , physical (getting one's foot caught under a boulder); this could be used in all aspects of life.
"Hey, did you want to come along on that three week expedition with us?"
"No, sorry dude, I'm tapped out. Fiscally, I'm hanging by a wedgie".
"Dude, I just got pwned by Mike. There's no way I could top that comeback. He's got me hanging by a wedgie.
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