Basically, this is when emotions break loose and people get hurt. A literal meaning would be that shit gets on everybody due to the intrinsic nature of the fan.
Expression - A derivative of the original: "The excrement made physical contact with a hydro-electric powered oscillating air current distribution device". Used primarily to describe a set of circumstances where events became inflamed to a point that control was lost.
A term used when a situation goes from bad to worse. (When there is shit that stinks...thas bad. When shit hits a running fan, flings it all over the place, and spreads the wafting stank...thas WORSE!).
The situation where a recent catastrophe is further complicated by some application of Murphy's Law or further revelations. Taken from the mental image of the "fragrant and pictorial" mess that excrement would make if it came into contact with the blades of a fan...
The toilet in the 1970's space station "Skylab" had a suction fan and a safety belt to strap yourself down with in zero gravity.
Zero gravity would cause the faeces to float all over the place disasterously so there was airflow to suck the faeces into a bag, a bit like a vacuum cleaner does. Now, if the bag broke somehow, then the "Shit hit the fan!!".