I’ve always heard this used in refernce to fellatio rather than masturbation.
Male solo performance featuring ‘The Pleasures Of The Palm’.
My favorite euphemism is this one I read in The Onion:
"It’s ‘that time of the month’ when ‘I’m not at my best’ because ‘my vagina is bleeding.’
“The Operation of Love”? Wasn’t that by the Four Tops?
I always thought it had something to do with Reginald Maudling - a superb name for a politician - but according to Salon:
“Apparently Uganda’s female minister of foreign affairs was discovered in flagrante delicto in an airport lavatory…” I grew up with Private Eye. Wonderful stuff.
I’ve always quite liked: “Economical with the truth”
The vertical deployment of anti-personnel devices (translated: we bombed 'em)
That statement is no longer operative (translated: I lied)
He has left to seek other opportunities (tranlated: he got canned)
This situation presents us with unique challenges (translated: you aint gonna believe what we’re gonna have to do now)
Eating the “bearded clam”, or
Floss with moss…
both mean the same thing 
Currently, my favorite euphamism is “euphism”
I briefly knew a girl who referred to her genital area as her “Fuzzy Bear.” At first, I thought it was cute, until I realized that she never varied from this, no matter what the situation, and would go into a violent sulk if I laughed about it. Kind of creepy, after a while.
Goodness! How does one sulk violently? 
one other favorite, term we use when a group comes into the park that looks like trouble.
A bunch of “registered voters” just walked in
my favorites are
sex “Playing hide the salami”
masturbation “Roughing up the suspect”
menstruation “Having a visit from aunt flo”
How about all those hilarious ones at the end of the Grumpy Old Men movies?
“Looks like Chuck’s takin’ the log to the beaver!”
…a tomcat on the prowl!
…takin’ a skinboat to tunatown!
…about to enter the holy of holies!
…gonna bury his boner!
“What’ya say we go back to my place? I’ll show ya my hard salami!”
…my fatty alfredo!
…my man sized maniccatti!
…my caneloni!
[slight hijack]
A few of my friends and I had an inside joke with squares being a euphanism for sex. It’s a very long story of how that came about, but to this day I start giggling incessantly whenever anyone says “square”. It gets really interesting when talking about geometry problems.
[/slight hijack]
In re: “Midnight Requisition” and “Liberating Equipment”
At our college, stealing was deeply frowned upon, but a lot of common use furniture was Relocated to private rooms.
I rather like “talking to Ralph on the big white phone” for puking one’s guts out over the toilet, presumably after drinking too much.
“out by the pool” = unemployed
Also, instead of suggesting that there may be crime at some public event, one L.A. newscaster said, “The Los Angeles Police Department will be attending the festivities to ensure that the merriment does not get out of hand.”
The euphemisms for death I use these days are “the doctor checked his watch” (I watch a lot of Learning Channel medical programs, and I’ve noticed that doctors need to note the time of death – most of the time, they’ll check their watch when a patient is declared dead) and “he timed out” (because I’m an online gaming fiend).
When someone’s crazy they’re “a shot short of an Americano” or they “have really bad ping to the reality server”.
Euphemisms for being crazy or stupid:
-His elevator doesn’t go all the way to the top floor
-Not the sharpest knife in the drawer
-Not the brightest porch light on the block
-A few sandwiches short of a picnic
-A few fries short of a Happy Meal
-The light’s on, but there’s nobody home
I bet there’s a million of these.
I took a Language and Linguistics class, and we were talking about how we use different euphemisms for different situations or settings. For example, we might use “intoxicated” or “DUI” in a newspaper story but might range from “drunk” to “wasted” to “sh*tfaced” when talking to others.
I’m afraid this might be hijacking the thread towards general slang instead of just euphemism, but notice the drug slang that has completely lost its drug connotations: “wasted” can mean drunk or just exhausted; “crashed” or “crashing” means going to bed/sleep. I’m sure there are more of these, too.
A classmate of mine on the Trauma Surgery team was once called to the ER for a “pedestrian vs. train”. “No hurry,” they added.
It bugs me around the hospital that no one can say a patient “died”. It’s always either “succumbed” or “expired”. I prefer “went Home with a capital H” or “bit the green weenie” myself.
I was always told that the French term for genital crabs is papillons d’amour, or “butterflies of love”. That has to be near the top.
Dr. J