Joanne, that same thought crossed my mind as soon as I heard the word, too. My understanding of “charnel house,” though, is that of a repository for dead bodies. I haven’t been able to find a connection between them, though.
Your guess reminds me of the word “shambles,” which indeed has its roots in the idea of a bloody slaughterhouse.
It’s a great example of how the original, vivid sense of English words can get really watered down over the years, no? Today we’d not think anything of telling a teenager his room is a shambles. But the word’s origins are pretty icky!
I’d LOVE to know if something similar’s going on with charny, but I’ve never seen any evidence for it.