Hello Kim,
Interesting question!
As wretched as I am, these Arabs believe that the chastisement that awaits me in hell is far more severe and lasting.
The meaning is something like, 'even though I am already wretched my fate in hell will be worse according to the Arabs.' So it's a meaning that goes ' I am at this level A' and it's going to get worse.
The structure:
As wretched as I am - this is a chunk, there is no separate meaning for the first as or the second as. The meaning is just 'I am wretched'. There is an English Christmas carol which contains the phrase, 'as poor as I am' and the meaning is 'I am poor' with the additional sense of linking to the next ppart of the sentence with a 'because/even though'
So, 'even though I am wretched, my fate will be worse in hell
As poor as I am, I can't afford a new car - Because I am poor I can't afford a new car.
I hope this helps, it's not a definitive answer but I hope it gives you a sense of the meaning and structure.
Best wishes,
Richard