In The Deptford Trilogy by Robertson Davies there is a passage referring to the memories of a character who is, essentially, crazy and I can't tell whether or not the term "blue mouth" is literal or if it has some figurative meaning:
She hasn't any idea of the past, except for horrible mixed-up memories of being tied up, and Paul disappearing, and Amasa -- she always remembers him with a blue mouth, like a rotten hole in his face-- telling God he forgave her for ruining his life.
I'm confident the urban dictionary definition isn't applicable here, but don't know if anything else fits. The story takes place in Canada circa 1920's.