What does "take the rag off the bush" mean?

Idiom Idiocy: What does “take the rag off the bush” mean?

This idiom takes the rag off the bush! 

     I must admit this is a new one for me.  I never heard this phrase before.  I’ve been thinking about it this morning and without research I cannot even begin to imagine what it could mean. Even in the context of a sentence of was still unsure. (Big surprise there, folks!)  I even struggled with a literal translation.

     I could not for the life of me figure out why something would take the rag off the bush, because I cannot fathom why the rag was put on the bush in the first place.  Why are we putting rags on bushes?

     The only time I had ever seen anyone put a rag on a bush was in 1999, just after my husband and I moved from Brooklyn, NY to Mississippi (talk about culture shock).  It was early autumn and just before dusk the woman across the road was outside putting dish rags and small blankets over her bushes.  The blankets draped over her large azalea bushes and little dish rags over small plants and bushes.  I was perplexed.  I watched the woman carefully placing each rag, wondering what in the world she was doing.  My curiosity was killing me (why does curiosity kill the cat?) so I walked across the road to ask what she was doing. 

     Apparently, there was going to be a frost that night and in order for her plants to survive she needed to keep them warm by covering them.  And you guessed it… in the morning she took the rags off the bush.  So when Cathy posted this phrase on my blog, I, being the literal-minded Aspie I am, was reminded of a woman in Mississippi literally taking rags off her bushes.

     Now for the actual answer to the question:

What does “take the rag off the bush” mean?

     I have found two popular meanings, or I should say ways the expression is used. Nothing is every simple.

From Word Detective:

To “take the rag off the bush” means “to excel, to be the best or most triumphantly successful.”

This meaning appears to date back to the early 19^th century when it was common to hold impromptu shooting contests.  The targets were mere rags hung on bushes. The best shot would hit the rag and quite literally take the rag off the bush.  Triumphant success; end of competition. 

Used in an ironic sense, it means “to be breathtakingly outrageous” or, in the current vernacular, “to take the cake” (“You do take the rag off the bush, boy,” R. Coover, 1977).

Really? “To take the rag off the bush” means “to take the cake.” What does taking the cake have to do with being outrageous? Isn’t that like answering a question with a question? I need more coffee!

FromUrban Dictionary.com: Take the rag off the bush

This is an old country expression which denotes something outrageous, going above and beyond the ordinary—surpasses everything.

CathyC. Hall wrote:

My mom (who's from Savannah, GA) has said it all her life, and now I say it. Like when something really annoys me, say the library closes early because it's so hot (which it did!), I'll fuss and fume, saying, "Man, that really takes the rag off the bush!"

My definition gleaned from those above: absurd and infuriating; just like this idiom! I cannot make a connection between the gunslingers triumphs and today’s usage of it being something ridiculous.

I saw this comment, “This article takes the rag off the bush!”  I cannot for the life of me figure out if this was meant as a compliment or an insult.  It is a great article, triumphant and ending all competition, or it is completely outrageous and infuriating.  Your guess is as good as mine!