(1) A response to something that is so extravagantly absurd and humorous, such that it can be considered laughable, to the point of inspiring extreme ridicule for a preposterous situation.
(2) Used to describe a situation that can be considered so insane and ridiculous to an extreme degree; and when no other words can possibly be conjugated.
(3) Completely devoid of any conscious sense, wisdom or all that is unholy.
"... and then he jumped off the roof of that abandoned building when the helicopters came? shit was ridoinkulous!"
"Every year at Eric's birthday party he always dumps a few glasses of water, this year was ridoinkulous"
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