We talk about our 'guts being all tied up in knots through worry', so I guess this is an abbreviated form of that.
You might think of translating :
Look at you, guts all tied in knots, scared and worried.
Look at you, your guts in knots, scared and worried.
dichelson, the phrase 'tied up' can be used in 2 different ways.
The first way is as David L. said, 'tied up' can mean one is worried, that their guts are in knots because of their nerviousness.
The second way can show that you are occupied with something to the point where you can't leave it. For example:
"I'd like to come to your party, but I have a lot of homework and have to go to a wedding, so I'm a little tied up right now."