http://www.darwinawards.com/stupid/stupid1998-10.html
Except that it wasn't exactly a belt sander, near as I can tell. I guess I remembered it wrong. Either way, I suspect this might be something of an apocryphal thing told among nursing teams to keep them amused during hours-long shifts as this isn't exactly how I remember it being told.
Err, just before hitting submit, I stumbled across this. Apparently the story is true:
http://www.snopes.com/risque/penile/scrotum.asp