He squints like a bag of nails; i.e. his eyes are directed as many ways as the points of a bag of nails. The old BAG OF NAILS at Pimlico; originally the BACCHANALS.
Definition taken from The 1811 Dictionary of the Vulgar Tongue, originally by Francis Grose.
bag * baggageNathan Bailey's 1721 Dictionary of canting and thieving slang
John S. Farmer's collection of canting songs and slang rhymes