What does "You talk so hip, you're twisting my melon, man" mean?

Sounds a lot like a jazz fans compliment to me, meaning he just heard something he liked.

Aye yay, up for it, mad for it, 'avin' it large. I hope you had a merry Crimbo and a buzzing New Year. Sorted.

You are speaking in such a trendy and modern fashion that you are befuddling my brain.

Watch the Biography on Steve McQueen who was a tough working class actor who didn't like too many lines. One of his directors said he'd say "You're twisting my melon, man" when he thought he was asking too much of him. He'd also go on to say that he talked so hip he hardly knew what he was saying. For instance he'd say "Who's the man with the juice?" which meant "Who's the man in charge?" As I said, check out the Biography.