Something thats is grows nasty or sick but there is interest and amazement in it. Then ending up being a hybrid of the word gnar and nasty which ends up gnarsty
Joe "Man have you seen the worlds biggest turd"
Darnell "Damn I aint looking at that shit you're sick"
Harold "It's pretty gnarsty I tell you
a version of the word gnarly: also a word used in substitute to patronize or insultintelligence of fags who say "gnar: an over exaggerated word to describe the level of "gnarlyness"
DANNY: That car just did a 360,
RICK: Haha, dude gnarshmallow.