[TMRC] and the MIT hacker culture of the early '60s seems to have developed in a milieu that remembered and still used some WWII military slang (see also [foobar]). It seems likely that `kluge' came to MIT via alumni of the many military electronics projects that had been located in Cambridge (many in MIT's venerable Building 20, in which [TMRC] is also located) during the war.
The variant `kludge' was apparently popularized by the [Datamation] article mentioned above; it was titled "How to Design a Kludge" (February 1962, pp. 30, 31). This spelling was probably imported from Great Britain, where [kludge] has an independent history (though this fact was largely unknown to hackers on either side of the Atlantic before a mid-1993 debate in the Usenet group alt.folklore.computers over the First and Second Edition versions of this entry; everybody used to think [kludge] was just a mutation of [kluge]). It now appears that the British, having forgotten the etymology of their own `kludge' when `kluge' crossed the Atlantic, repaid the U.S. by lobbing the `kludge' orthography in the other direction and confusing their American cousins' spelling!
The result of this history is a tangle. Many younger U.S. hackers pronounce the word as /klooj/ but spell it, incorrectly for its meaning and pronunciation, as `kludge'. (Phonetically, consider huge, refuge, centrifuge, and deluge as opposed to sludge, judge, budge, and fudge. Whatever its failings in other areas, English spelling is perfectly consistent about this distinction.) British hackers mostly learned /kluhj/ orally, use it in a restricted negative sense and are at least consistent. European hackers have mostly learned the word from written American sources and tend to pronounce it /kluhj/ but use the wider American meaning!
Some observers consider this mess appropriate in view of the word's meaning.
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