Benjamin Franklin invented an instrument called a glass harmonica. It was a mechanical version of wet fingers on crystal glasses.
Supposedly it had the reputation of driving those who played it and the listener "mad" or my favorite, it called Satan up from hell.
I heard it played at the Franklin institute here in Philly once and it was quite beautiful.
I know that in the U.S. in the 20's/30's (and probably earlier) the fiddle was considered to be the devil's instrument. I've read that this belief goes back to Europe and is probably almost as old as the instrument itself. It seems that it's usually whatever instruments a culture used to play dance type music that are considered to be "evil", or at least non-moral.
Not a specific instrument or specific genre, but a specific performer: Niccolò Paganini. In addition to being one of the greatest violinists in history, he was a flashy and charismatic showman, which resulted in sellout crowds and international celebrity all throughout Europe. He was so good that it was rumored that he sold his soul to the devil; these rumors were so widespread that he was initially refused a Christian burial at his death.
There was a whole book written about Paganini and the rumors of his Faustian bargain: http://books.google.com/books?id=P1qJRimF6noC&printsec=frontcover#v=onepage&q&f=false