I recently overheard someone referring to another person as being 'Crazy as a coconut'. I hadn't heard this phrase before so later on I started researching. My initial thought was that he had made up himself as I didn't find many results. I did however see this phrase used as lyrics in a song by a band called 'The Avalanches' titled 'Frontier Psychiatrist'. I see someone else had raised question on Answers.com and received an obscene response but hoping someone here might provide a more helpful response as to its origination.
The phrase is “crazy in the coconut”:
Popularized by the Australian electronic music group The Avalanches in their song "Frontier Psychiatrist".
Lie down on the couch, what does that mean?
You're a nut! You're crazy in the coconut!
What does that mean? That boy needs therapy
It refers to the slang meaning of coconut as head whose usage dates back to the first part of the 19th century.
1848 - Bell’s Life in Sydney 30 Dec. 2/6: Kenny shook his cocoa nut like a mandarin in a Ludgate Hill Grocer’s.