Etymology
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funky (adj.)

1784, "old, musty," in reference to cheeses, then "repulsive," from funk (n.2) + -y (2). It began to develop an approving sense in jazz slang c. 1900, probably on the notion of "earthy, strong, deeply felt." Funky also was used early 20c. by white writers in reference to body odor allegedly peculiar to blacks. The word reached wider popularity c. 1954 (it was defined in "Time" magazine, Nov. 8, 1954) and in the 1960s acquired a broad slang sense of "fine, stylish, excellent."

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Definitions of funky

funky (adj.)
offensively malodorous;
the kitchen smelled really funky
Synonyms: fetid / foetid / foul / foul-smelling / noisome / smelly / stinking / ill-scented
funky (adj.)
(of jazz) having the soulful feeling of early blues;
Synonyms: low-down
funky (adj.)
stylish and modern in an unconventional way;
she likes funky clothes
we did it all in black and white in a very funky sixties style
funky (adj.)
in a state of cowardly fright;
From wordnet.princeton.edu