In the
literal sense, this means to insert the penis in its entirety into a females vagina, leaving nothing but your balls outside of said vagina.
It can also be used to
imply that the action or event was taken to its extreme, with
no other possible courses of actions available.
Joe: "Dude I came back to my controller and you were
balls deep up in my ass."
Me: "
Ahahahahahaha!" *accidently walks off cliff on map Jungle in Black Ops
Person 1: "Dude, we're balls deep in the Middle East now that Obama's president."
Person 2: "Not as deep as I was in your mom last night."
Person 1: "WTF?!"