Is this a selenium rectifier?
Any idea what it is?


Your guess of a selenium rectifier seems likely. Based on your analysis, it may have failed. This is not surprising; selenium rectifiers were rather fragile and prone to failure already, and using one in a high-vibration environment (like an electric chisel!) would have placed it under a lot of stress.

This device probably used a selenium rectifier because silicon rectifiers did not exist at the time it was constructed, or were not large enough to use in this application. If a similar device were to be built today, it would use a silicon diode -- there is no advantage to the use of a selenium rectifier.

Selenium is rather toxic. If you have touched the disks inside this device, wash your hands thoroughly. Do not place this device in the trash; please bring it to a local hazardous waste center for disposal.