What would happen if we had a device that produced oxygen inside of our lungs?
You might need to narrow your parameters a bit.

Just things to consider:


Our lungs are not hollow organs that can accommodate an oxygen producing machine. They are basically narrow tubes that get smaller and smaller until they end in a tiny balloon-like structure - about 700 million of them. Where would the machine go?
100% oxygen is toxic to the lungs, as it is to many other things as well.  
How would the oxygen diffuse to all the other areas of the lung that need oxygen? Diffusion is a complicated process in a structure like the lungs.
from what would it produce oxygen? For example, would it extract it from water? How would the body deal with the loss of moisture from the air in out lungs? Where would the excess hydrogen go?
Hydrogen is highly flammable around 29%. Would we become fire-breathing?
How would the machine not hyperinflate and thus injure the lung?  
How would we get rid of CO2? We would still have to breathe in and out.
Etc.