卧槽 is a toned-down, homophonic replacement for the obscene 我肏 (wǒ cào, 'fuck'). Common online and in casual speech but still vulgar; avoid in formal settings. Similar softenings: 我去 (wǒ qù), 我靠 (wǒ kào).
memory
Literally 'lying (in the) trough' — but nobody hears it that way. It's purely a phonetic dodge for the real curse word, chosen because 卧 and 我 share the w- sound.
