Odtnhj

The first time I heard "gross" being used to mean "disgusting" was probably around the late 1980s, and at the time I felt it was some sort of a corruption of "grotesque"...

I'm wondering if there is a longer history of this usage, or am I right in saying it stems from a more recent misuse?

"Gross" dates back to at least the 1380s. The OED lists the following quote under the definition "Of conspicuous magnitude; palpable, striking; plain, evident, obvious, easy to apprehend or understand. Obsolete.":

Hoolynesse of lif techiþ rude men by groos ensaumple.
_{Wyclif's English works, c1380}

The word came from the French word gros(se) meaning "big, thick, coarse" and ultimately dates back to the lat Latin word grossus meaning "thick". Several of the other early quotes use it to mean "big". It's also the same word as "gross" meaning 144 and in "gross domestic product".

The 1989 OED page for "gross" is available for free here with more information on the older history.

The sense you're referring to ("disgusting") isn't in the above 1989 version, but it's in the OED3 (behind a paywall). The earliest quote with this meaning is from 1959:

Terms expressing approval or disapproval are intelligible to the initiated only, for their real meaning is often dependent upon intonation. Great, the greatest, gross,..and tremendous are either complimentary or derogatory, depending upon how they are said.
_{American Speech}

It's likely that it's related to the older sense of the word meaning "[r]ude, uninstructed, ignorant" or "[e]xtremely coarse in behaviour or morals; brutally lacking in refinement or decency".

As explained in the following extract, the meaning of disgusting was not a big semantic jump from the original meaning and usage of gross. This connotation appears to have become popular as a slang term among teenagers in the ‘60s/‘70s, but its earliest usage appears to date from 1958:

• 
  Meaning "disgusting" is first recorded 1958 in U.S. student slang, from earlier use as an intensifier of unpleasant things ( gross stupidity , etc.) (Etymonline)

Gross:

The word gross has been in English for hundreds of years. We got it from French, where it means "big" or "fat." It took on a variety of senses in English related to size, including "coarse" (gross grains as opposed to fine), "strikingly obvious" (grosse as a mountaine), and "whole" (gross as opposed to net value). It also picked up negative senses like "vulgar," "crude" (Grose folke of rude affection Dronkerdes. Lubbers, knaues), or "ignorant" (a grosse unlettered people).

From there it’s not a big jump to the current sense of disgusting. There’s always been something repulsive, or at least unsavory, in the word gross.

Gross did not undergo a big change in meaning, but it did undergo a big change in context. In the late 20th century, young people started to use it a lot—like, a lot a lot. So much so that old people noticed it, and didn’t like it. As one critic said in a 1971 issue of The Saturday Review, “Gross has always meant something coarse and vulgar. But as used by the teens, it runs the gamut of awfulness from homework to something the cat contributed to ecology.” Gross became slang.

(mentalfloss.com)

Note also the usage of gross-out:

(slang)
something that is disgustingly offensive.

(First recorded in 1970–75; noun use of verb phrase gross out)

(Random House Unabridged Dictionary)

Edit by WS2:

Supplementary to this answer, and also that of @Laurel, reproduced below is sense 15 of the adjective gross per the current online edition of the OED. Clearly the "student slang" to which Etymoline refers is closely related here.

The current online edition of the OED includes the following - to which the "student slang"

15. Extremely coarse in behaviour or morals; brutally lacking in refinement or decency.

a. of persons. 

?1533 G. Du Wes Introductorie for to lerne Frenche sig. Sii Grose folke of rude affection Dronkerdes..Lubbers,
knaues.

1667 Milton Paradise Lost i. 491 Belial..then whom a Spirit more
lewd Fell not from Heaven, or more gross to love Vice for it self.

1693 Dryden tr. Juvenal Satires vi. 122 Agamemnon's Wife Was a
gross Butcher, with a bloody Knife.

1772 E. Burke Corr. (1844) I. 402 The Turks..grow more gross in
the very native soil of civility and refinement.

1881 Evans in Sp. Com. 1 Cor. Introd. 239 Society of high culture,
but in morals lax, even gross. absolute.

b. of habits, language, pleasures, etc.

1598 Shakespeare Love's Labour's Lost i. i. 29 The grosser manner
of these worldes delyghts: He throwes vppon the grosse worlds baser
slaues.

1725 D. Defoe New Voy. round World i. 169 The Motive of their
Adoration being that of meer Terror, they have certainly gross Ideas.

1791 J. Boswell Life Johnson anno 1749 I. 103 [Paraphrasing
Johnson:] Some of them [sc. Juvenal's Satires]..were too gross for
imitation.

1877 ‘Rita’ Vivienne i. i. 15 Of life in its grosser, harsher
phases Albert knew scarce anything.

Gross appears to be word of Germanic origin. It appears not in classical Latin but in late Latin / early medieval Latin, when the Roman Empire relied heavily on foreign troops, many of them speaking early forms of German. Once it was absorbed in late Latin, it spread into Italian (grosso) and French (gros / grosse). In Dutch it became "groot".

In German, 'gross' simply means big but is used extensively in compound words from 1) Großvieh (big cattle), Grossmutter (grandmother) to Groß-Berlin (greater metropolitan area of Berlin). As it is and was used so often, it acquired all kinds of shadings from neutral (Grossmast, the tallest mast on a sailing ship) to positive (Großbild, a big-screen television) to negative (Großtuer, an arrogant, pompous person). The negative connotation encompasses things that are scarily, off-puttingly big. In German, however, to express disgust, "widerlich" or "ekelhaft" are usually employed, either alone or in combination with gross: "Das ist widerlich gross!"

1) https://www.duden.de/suchen/dudenonline/gross?page=1

In Chapter 1 of the Lord of the Rings ("A Long-Expected Party"), Bilbo offends some of the guests by noting there were 144 guests, which exactly matched the sum of his and Frodo's ages: "One Gross, if I may use the expression". Tolkien suggests that the insult may have been deliberate in the some cases, e.g. the Sackville-Bagginses. So I think it is safe to say that gross wasn't considered complimentary in 1954.