This is from an extension of the wrestling fan phrase and has grown into the modern lexicon. It usually comes from something you enjoyed in your childhood that you still enjoy into adulthood without logical reason.
"Man, when I saw Ozzy Osbourne... I started marking out"
"Theo Fleury is trying to make a come-back? I'm totally marking out dude!"
2. A term for Masturbating to a wrestler
2. I was up late last night marking out to pictures of Mickie James