Disadvantage yourself in order to do harm to an adversary.
The Oxford Dictionary of Quotations lists this proverb as "mid 16th century - mid 14th century in French". I wouldn't doubt them but the earliest citation I can find in print is much later. Grose's 1796 edition of the 'Classical Dictionary of the Vulgar Tongue' explains it thus:
"He cut off his nose to be revenged of his face. Said of one who, to be revenged on his neighbour, has materially injured himself."