What could it be?

"In 2009 Muggeseggele, literally referring to the scrotum of a male housefly, was elected in a readers survey of Stuttgarter Nachrichten, the largest newspaper in Stuttgart as most beautiful Swabian word, with a large lead on any other expression.[3] The expression is being used as a ironic small meausurement unit and is deemed useable towards children."

http://en.wikipedia.org/wiki/Swabian_German

How do you pronounce it?

Unfortunately I can't find anything that gives the proper pronunciation but you can hear Swabian spoken here:
http://www.kindernetz.de/barz/fun/schwab......dex.html

"While Muggeseggele has often been used to refer simply to an extremely small measure, actual measurements of fly ***es by an entomologist at the Naturkundemuseum in Stuttgart gave an average length of 0.22 millimetres (0.0087 in)"

http://en.wikipedia.org/wiki/Muggeseggele