Pseudo german. A compound of "Scheisse"(=shit) and "Kopf"(=head) that forms the literal translation of the popular english insult "shithead". Doesn't really work in german, because "Scheiss-" is an equivalent of "fucking ...", so "Scheisskopf" would mean something like "fucking head".
"Scheissekopf" isn't an alternative, it doesn't work at all.
The boys looked up some words in the dictionary and came up with "scheissekopf".
Nickname given to bales of marijuana thrown overboard or out of airplanes. Origin is reportedly from members of the US Coast Guard in the area of Southern Florida.