I am a bit younger than Matt and I can concur with him. In Canada at least, this word in my circle of friends as I interpreted it was basically "you F'king A-hole", rather than just being called an "A-hole".
I've been called it quite a few times in my life during a sport or some soccer field argument. It wasn't until late in high school when I was seeing a girl and she said to me that "some of the girls in school were sure you were a f_g". I was perplexed, "why would they think I am some kind of A-hole". She said "they don't, some of them think you're gay".
This came down to the fact I was a big sports guy and avoided dating girls from my school, even when I had multiple opportunities, until as I said, late in H.S.
We knew a guy who was gay and we stayed over at his house after a night out at a club. I couldn't care less what people do or who they love, to each their own. When I heard this story about Matt I actually found it a bit refreshing that I was not the only one who misinterpreted this word for so long. For him it's been much longer.
Sometimes when you hear a word or have repeated it yourself in when a kid, it can rear it's head at some point when you are angry at someone.
We had a former Blue Jays player who called an ump that, also allegedly a Leaf player (though it wasn't confirmed) in the heat of the moment. Our language police in the media made sure to make it a story.
They probably heard the word many times growing up. It does have a nice, strong right to it, similar to the F word. I recall the baseball player adfter apoligizing saying, "I don't even know where I heard the word before". That's what happens in the heat of the moment when the neurons fire off in a lazy manner.