One meaning of blow (used mostly, it seems, by 17th century entomologists) is "to deposit eggs or larvae on"-hence the blowfly, which lays its eggs on meat or wounds. Flyblown has its origins in the very unpleasant image of a blowfly's victim, and it's from this literal meaning that the more common senses come. Phrases such as flyblown shack and flyblown restaurant still suggest the actual presence of flies, if not necessarily their embryonic precursors.