Perhaps similar to:
verb - transitive
* to reprimand severely."
by WalterGR, Sacramento, CA, USA, Oct 03 2009 (Edit definition)
In medieval times (during about the 18th Century), some warriors would take body parts as war trophies.
"If someone skins you alive, they admonish and punish you hard."
It probably means that the person will "have his skin." Same meaning and graphically, would look the same.