The Collaborative International Dictionary of English v.0.48:

Shag \Shag\, v. t. [imp. & p. p. Shagged; p. pr. & vb. n.
   Shagging.]
   To make hairy or shaggy; hence, to make rough.
   [1913 Webster]

         Shag the green zone that bounds the boreal skies. --J.
                                                  Barlow.
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The Collaborative International Dictionary of English v.0.48:

Shagged \Shag"ged\, a.
   Shaggy; rough. --Milton. -- Shag"ged*ness, n. --Dr. H.
   More.
   [1913 Webster]

WordNet (r) 3.0 (2006):

shagged
    adj 1: having a very rough nap or covered with hanging shags;
           "junipers with shagged trunks"; "shaggy rugs" [syn:
           shagged, shaggy]