I once was about to blurt out the "R" word in front of someone who has a disability. I tried to say ridiculous instead but it was too late...I had already begun to say "Retard...so out came RETARDICULOUS"
Something or set of circumstances that is ridiculous to the point of retardation. It implies that only someone who is mentally challenged would accept/impose it.
"First my boss tells me to do one thing then after I've accomplished it, he tells me to undo it and do something else completely. I've spent my whole day working for nothing. It's retardiculous."