I agree that "three sheets to the wind" is nautical. The sheets are the ropes which hold the sails to (relatively) fixed bits of the boat, so if 3 (out of more presumably) sheets are "to the wind" or loose, then the sail will flap around, and presumably the boat will also travel unsteadily in a drunken manner.

Do clowns get pie-eyed
Do cooks get stewed
Do nurses get plastered
Do blasphemers get stoned
Do garage mechanics get well-oiled
Do laundrette assistants get 3 sheets to the wind


Rod Ward