When someone beats the crap out of you and you become blue/black with bruises. Puffennagen is derived from the italian word 'Puffo' translation of Smurf (little blue gay elf sort of thing that wears white hats and is asexual). Then you add the end part (ennagen) which shows a Germanderivation. When they call you a Puffennagen usually you are a german gay guy or else an asexual.
Usually from Saxony or Austria