Green’s Dictionary of Slang

(US) a situation or thing that is a mess or that is troublesome.

1946		J. Adams From Gags to Riches 135: I’m so glad that our gang never give each other the ‘louse-up’.
1971		Seattle Times 13 June H5: For me, that would just be a louse-up [HDAS].
1977		Popular Science Apr. 20: Give any assignment to a committee and the odds are in favor of a louse-up somewhere [HDAS].