I was sent a link to a website "exposing" Calvinism because it contained a bunch of Luther quotes. Many of the quotes I've gone over already, but there were a few that I've never examined. Here's one in particular found in a pdf e-book (pictured left) from this site:
"Your sin can not cast you into hell."
 http://www.nazarite.net/the-founders.html-- Martin Luther: August 1st, 1521 http://www.sullivan-county.com/identity/reformers.htm
The link given for this quote goes over to a web page entitled, The Protestant Reformers Were Frauds (An Anabaptist speaks out). The web page states, "Martin Luther was not a great reformer like the history books teach, but he was a fraud! Here are some quotes from Luther which shows that he taught the heresy of Once Saved Always Saved," and thus follows a number of undocumented quotes from the Reformers. I did a basic search for "Your sin can not cast you into hell" across the Internet (with the spelling "can not") and came up with only one other relevant hit: some sort of Messianic Jewish web page: The Reformers (turn your computer's sound off for this page). This page likewise lacked meaningful documentation. One of these pages probably took the quote from the other.
This quote appears to come from Luther's Church Postil, "Nineteenth Sunday after Trinity, Matthew 9:1-8 ( October 3, 1529). It can be found on this page.
Luther begins by explaining that "external righteousness be urged both in admonitions and in threatenings, and not be considered as of no importance. For whosoever despises it, despises God and his Word." He explains that to live peacefully in this world with each other, we need to obey the ruling authorities and live honestly according to the second table of the Ten Commandments. If we don't, authorities have been set up to punish those who break the law. He then explains that the church of his day had set up false works said to be pleasing to God in order to obtain a right standing with him ("we tried all kinds of works, ran hither and thither, expended and wasted our energies, money and property; here we established masses and altars, there cloisters and brotherhoods, and every one was groping for the way in which he might serve God"). God though requires that whatever one does, however domestic and trivial it may seem, be done to His glory. All of this outward external righteous one engages in is because God commands it, not because one can earn righteousness or eternal salvation from it.
Luther then moves to discuss another kind of righteousness, the righteousness of faith in which one receives the grace of God and the forgiveness of sin. When God forgives your sin, you stand eternally righteous before him. Certainly though in this world Christians are still plagued by their sins. They accuse the believer that his sins are no longer forgiven. External good works do not assure a Christian that his sins are forgiven. Luther states:
15. Therefore this doctrine, that our piety before God consists entirely in the forgiveness of sins, must be rightly comprehended and firmly maintained. We must therefore get beyond ourselves and ascend higher than our reason, which keeps us in conflict with ourselves and which reminds us both of sin and good works; and we must soar so high as to see neither sin nor good works, but be rooted and grounded in this article and see and know nothing besides. Therefore let grace or forgiveness be pitted not only against sin, but also against good works, and let all human righteousness and holiness be excluded. Thus there are in man two conflicting powers: Externally in this life he is to be pious, do good works, and the like, But if he aims beyond this life and wishes to deal with God, he must know that here neither his sin nor his piety avails anything. And though he may feel his sins which disturb his conscience, and although the law demands good works, he will not listen nor give heed to them, but will boldly reply; If I have sin, Christ has forgiveness; yea, I am seated on a throne to which sin cannot attain.
16. Therefore we are to regard the kingdom of Christ as a large, beautiful arch or vault which is everywhere over us, and covers and protects us against the wrath of God; yea, as a great, extended firmament which pure grace and forgiveness illuminate and so fill the world and all things, that all sin will hardly appear as a spark in comparison with the great, extended sea of light; and although sin may oppress, it cannot injure, but must disappear and vanish before grace. They who understand this, may well be called masters, but we will all have to humble ourselves and not be ashamed to keep on learning this lesson as long as we live.
17. For wherever our nature succeeds in finding sin, it tries to make an unbearable burden of it. Satan fans the spark and blows up a great fire which fills heaven and earth. Here the leaf must be turned and we must firmly conclude: If the sin were ever so great or burdensome, this article of faith is nevertheless much higher, wider and greater, which has been recommended and established not by man's wisdom, but by him who has comprehended heaven and earth and holds them in the hollow of his hand. Is. 40, 12. My sin and piety must remain here on earth as far as they concern my life and conduct. But in heaven above I have another treasure, greater than either of these; there Christ is seated and holds me in his arms, covers me with his wings and overshadows me with his grace.
18. You may say: How is this, since I daily feel sin and my conscience condemns me and threatens me with God's wrath? I answer: For this reason, I say, one must understand that the righteousness of a Christian is nothing that can be named or imagined but the forgiveness of sin, that is, it is a kingdom of power which deals only with sin and with such abundant grace as takes away all wrath. It is called the forgiveness of sin for the reason that we are truly sinners before God; yes, everything in us is sin, even though we may have all human righteousness. For where God speaks of sin, there must be real and great sin; so also forgiveness is no jest, but real earnestness. When you, therefore, consider this article you have both. Sin takes away all your holiness, no matter how pious you are on earth; again, forgiveness takes away all sin and wrath. Therefore your sin cannot cast you into hell, nor can your piety elevate you into heaven.
19. Therefore, when the devil disturbs your conscience, and tries to bring despair to your heart by saying: "Have you not learned that one must be pious?" then answer courageously and say: Yes, you are right; I am a sinner, that I have known before; for this article, called the forgiveness of sins, has taught me this long ago. I am to be pious and do what I can before the world; but before God I am willing to be a sinner, and to be called nothing else, that this article may remain true, else there would not be forgiveness or grace; but it must needs be called a crown of righteousness and of merits. Therefore, although I feel nothing but many and great sins, yet they are no longer sins; for I have for them a precious panacea and drug which takes away the power and poison of sin and wholly destroys it. It is this word, "Forgiveness," before which sin disappears like stubbles before the fire. Without it no work, suffering, or martyrdom avails against the smallest sin. For without forgiveness sin is and remains pure sin, which condemns us.
20. Therefore only confess this article heartily and boldly and say: Before the world I may be pious and do everything that is required, but before God it is only sin according to this article. Therefore I am a sinner, but a sinner who now has forgiveness and who sits at the throne where grace rules supreme, Ps. 116. If this were not so I would be a sinner like Judas, who saw only his sin, but no forgiveness. But Christians, no matter how much sin they feel in themselves, in that word forgiveness see much more abundant grace presented to them, and poured out over them.
Working through a quote like this is always a blessing, because it's nothing other than Luther expounding the Gospel and living the normal Christian life. If this was the context from which the quote comes from, it's sad that the websites which took it appear to have missed the Gospel which surrounds the quote. Luther says in the sermon, "...man's understanding cannot get beyond this external piety of works, and cannot comprehend the righteousness of faith." How true this is indeed.