From other sources

http://www.poetrylibrary.org.uk/queries/lostquotes/?id=56#comments

Nigel Rees - A Word in your Shell-like - traces it back to the final couplet of a hymn by Miss Etta Campbell and TE Perkins;
"Too late! Too late!" will be the cry -
Jesus of Nazareth has passed by.
It has passed through a number of parodies such as;
"Too late! Too late!" the maiden cried,
Lifted her wooden leg and died.

http://www.abc.net.au/newsradio/txt/s1627980.htm

Jack emails to say: My mother, born around 1900, often used the phrase "Too late she cried and waved her wooden leg." Do you have any idea where this came from? Its significance defies my imagination.

It's a guess – but it's the best we have.
The world's leading expert on obscure quotations, Nigel Rees, has two columns on this expression (and its variations) in his book A Word in Your Shell Like. At end of those two columns he reaches no conclusion. However, there is a little more to be said. "Too late she cried and waved her wooden leg" seems to have been used as a comic exclamation – a humorous cry of despair when things go wrong. It quite possibly comes from a (now long forgotten) comic verse from the late 19th or early 20th century; which in turn may have (originally) been a parody of a 19th century Moody and Sankey hymn.

we were just having lunch and i used the quote and wondered its source. Had great fun reading everyones thoughts.