Yep, that's what it could mean alright. Replacing the compressor is not the worst of it. After internal compressor failure it is MANDATORY that the ENTIRE SYSTEM be THOROUGHLY flushed EVERYWHERE. There is lots and lots of debris in the system that, if not removed, will destroy your new compressor in short order.
To preliminarily check this, with the engine off, try to rotate the very forward part of the clutch mechanism. If it will not turn at all, then the compressor has failed internally. If it turns by hand, then you are very lucky and this means that the clutch is the problem.