Good question - I've used this quite commonly.
Some ways of rewording it can be, "it completely confounds and annoys me", "it stuns me" or "it makes my head implode." You would use this to mean you cannot tolerate someone's annoying habit, or that a situation is mentally intolerable.
I can't stand living in a huge city. It does my head in.
Every time I hear that annoying laugh of hers, it does my head in.