When I was in the hospital last year one of the food service people actually said this to me. She was completely serious, she just had a heavy accent and had no idea what she was saying. It was one of the few times I was able to have a good laugh in the midst of my pain-and-morphine-induced dreamworld.
And now... someone has made it reality! Well, a drawing anyway:
Mmmmm, toasted lice. Here's a link to the whole site of "terrorfying" breakfast cereals (thanks to Pete).