At the beginning of the type's active service with 24 Squadron, there were several incidents in which Dh-2s descending to land after patrol went into spins, crashed, and burned. It had a bad effect on the unit, and led to the nickname. A pusher type crashing nose first would be not only particularly prone to fire, but to trapping its pilot in the blaze, since both fuel tank and motor would be above (behind) him when the impact occurred. It was determined that what caused these crashes was cold. The pilot of a pusher drew no warmth from the engine at all, and sat essentially unprotected in a very stiff wind, bitterly cold always at altitude but especially so in winter when 24 began operations. After a couple of hours of this, a man's extremities could grow numb, to a degree that made working the controls difficult. Combine this with the tricky business of coming down to land, and misadventure could result, even for a skilled pilot. Improved clothing, a warmer season coming up, and increased understanding of how to avoid and how to get out of a spin, reduced the accident rate and incidence of such casualties, but the name did stick, and in any kind of a nose-down impact, the pilot or crew of any pusher type always was in dire straits.
On edit: I have always understood the name to be 'spinning incinerator', by the way.