My friend just shared this story, and I think I remember reading something similar when I was young, but I could have been making it up.
No, not outside of A Tale of Two Cities, which is probably where you read it.
The association with knitting women and horror stories is propaganda. Many working women worked with textiles, and many of them worked from home. Instead of staying home, some worked in the galleries of the National Assembly or the clubs. That way they could participate in politics while saving money on fuel and candles by being in a lit, warm public room. Because these women were generally supporters of the government during the Terror, they were a target for political attacks after that government fell. The first mentions of knitting came after the Terror, and in reality these women were mostly sewing. The juxtaposition of knitting and death was more potent because of the normal association of knitting and homely femininity. The word (female) knitter was also an insult aimed at poor women before the Revolution, probably referring to the work women performed in poorhouses.
Source: Citoyennes Tricoteuses by Dominique Godineau