A euphemism for male masturbation. The humor in this euphemism comes from the fact that a quarter sized violin is roughly six inches (the length of a typical erect penis). Violin's are also "hard", "made of wood", and require careful "fingering". Vibrato (a common ornamental technique that requires a rapid back and forth movement of the hand along the neck of the instrument) could also be given new significance in the context of this metaphor.
Yeah, I accidentally walked in on Derek playing the quarter sized violin if you catch my drift.