Wow's musical connection is intriguing. One of the usages I found for skank was someone who refuses to face their responsibilities. Makes sense with her skanky-manky 'dancing around the issue' premise.
I have a feeling though, that this usage started in the UK or one of the two major punk centers in the US, NYC or LA. The term skanking was appropriated from the UK based Jamaican community as early as the late 70s, possibly earlier. My punk rock buddies and I used the term skanking for dancing in Virginia, cultural backwater that it was, as early as 1979. It wouldn't surprise me if one of it's original meanings, that of smelliness or dirtiness, was used by punk rock kids to describe their nasty, sweaty selves after a night of dancing. The rest may have just evolved from there.