I first encountered the word "lurgy" in "Dr. Unheimlich's Disease Registry" (http://thesurrealist.co.uk/disease.cgi), one of those "Meme Generator" type things. I thought at first it was a suffix (as in allergy? metallurgy?) but it turns out to be a stand-alone word, mostly seen in Britain. (And it's pronounced with a hard g, not a j sound as in allergy.)

Apparently it usually appears in the phrase "the dreaded lurgi" –- "referring to a fictitious and highly infectious disease, apparently invented and made a byword by the Radio Goons." Goons scripts always spell it with an i at the end. However, they may not have made the word up completely, since "lurgy" is recorded in the English Dialect Dictionary (1898) as a dialectical variation on a more common expression “fever-lurden” (recorded from the 16th century and meaning "the disease of laziness"). Another vague possibility is that it is from the Lurgi gasification process, developed by the Lurgi company in Germany in the 1930s to get gas from low-grade coal, though this sounds less likely.

Various other sites give "lergy," "lurgee," and "lurgie" as alternate current spellings, and Radiohead's Pablo Honey album has a track called "Lurgee" with lyrics along the lines of "I feel better now you've gone."

The term now seems to be widespread in Britain, Australia, and New Zealand for any unspecified disease, not necessarily serious, but contagious and having some noticeable affects on the victim. (Lurgywatch.com, however, does specify that the lurgy they mean is a viral gastroenteritis; the single address given on the site is in Scotland. And one New Zealand site records it as slang for venereal disease.) The usage for illness occasionally extends to become a sarcastic synonym for disease or scourge: "that dreaded lurgy, marijuana."

One site records a British schoolyard taunt of "lurgy," equating it with American "cooties" (though this seems somewhat stronger than the use of cooties I knew as a kid):

"For the uninitiated, the game is played thus.

A child, usually from a poor family, with nervous excema, a lazy eye, a faint smell of wee and glue ear, is singled out by the others.

It is announced loudly that 'X has the Lurgy'.

It is the rule that anyone who subsequently touches X will catch the Lurgy thus reinforcing their loneliness, mortification, self-loathing and alienation."