Two knuckles deep refers to somebody who is digging for nose boogers while face to face with someone or a group of people, not hiding the event, letting everybody see the activity.
Victoria: Did you see that?!? Chad just went two knuckles deep!
Steve: Two knuckles deep?
Victoria: Yeah! He was digging for nose boogers right in front of us!
When you have overdone the drink/drug intake and have lost consciousness, only regaining consciousness to vomit or threaten to projectile vomit upon passers-by who mock your personal status.