Definitely a word with two meanings, one high German (a Schmuckler is a jewel merchant , no more and no less), and one more colloquial, about which we are now all sniggering gently (yes, yes, honi whatever) . You can see its evolution from refined to bawdy through the picturesque intermediary of "the family jewels". There is a hilarious scene in the old movie _One, Two, Three_, set in West Berlin, about a Coca-Cola magnate's daughter and a would-be East Berlin revolutionary (played by Horst Buchholtz, as I recall) exploiting just this ambiguity.

It's interesting that even schmuck-the-bawdy has a negative and a positive meaning - one the insult, the-word-you-can't-say-on-television (as in plain old "You schmuck''), and the other connoting a certain fondness for a hapless, unfortunate, generally well-meaning bumbler (usually "You poor schmuck" ).

Ain't language(s) wonderful?