I learned this song in day camp in Michigan in the mid - 60's. I used to know it all, but now I only remember the chorus and the gist of the story told in the verses:

Oh, Mr. Johnny LeBec, how could you be so mean?
We told you you'd be sorry for inventing that machine.
Now all the neighbor's cats and dogs will never more be seen.
He'll grind them up into sausages in Johnny LeBec's machine.

The story ran something like this:

Johnny LeBec created such a wonderful sausage-making machine, and needed meat for it. He killed his wife and ground her up, and then used the neighborhood pets, and then started using neighborhood children, when he could get them. Finally, the locals caught on to him and pushed him in his own machine. I, too, remember a verse saying the neighborhood cats and dogs were happy again.

Now that I think of it, it was a strange song to teach 7 and 8 - year olds!

I've been trying to find the song to teach it to my sons. Thanks for all the leads!

I also found reference to the story and song in the book, More Scary Stories to Tell In the Dark, by Alvin Schwartz, copyright 1984, ISBN 0-06-440177-4, if anyone is interested.