After digging around a bit I found an entry on The urban dictionary claiming it started on the TWoP Forums, adding that into the google gave me the following:
Q: What the heck is the 'Pit of Voles'?
A: The Pit of Voles is a nickname for fanfiction.net (another, less common one, is 'the Walls of Flesh'). I first saw it used by the ficbitches, but I am told that the very first ever appearance of it is archived here, in the ex-blog of tsukikoushi. I think the rationale behind it is something like since an infinite number of monkeys with typewriters will eventually give you Shakespeare's plays, then whatever the writers in the pit are, they aren't monkeys.

It makes sense.
On a side note, wikipedia redirects 'pit of voles' to the fanfiction.net page, but offer no explanation of why.

-Terry
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The problem with America is stupidity. I'm not saying there should be a capital punishment for stupidity, but why don't we just take the safety labels off of everything and let the problem solve itself? -xterm