It might be worth taking a look at this article which comes from the popular Australian electronics magazine "Silicon Chip", which deals with exactly what you are talking about it. The also did articles some years back about rebuilding the battery packs and made a special charger that was far better than most cheap power tool chargers and they explained why.http://www.siliconchip.com.au/cms/A_112247/article.html
Unfortunately, if you aren't a subscriber then you have to pay to see the rest on the net - unless you happen to have the print copy of course ;)
Certainly keep away from any 'non-isolated' solutions like the cap method from Microchip, Adam was right, your tool just won't be designed with suitable insulation ratings and it will be a deathtrap - not that it would be easy to get that type of circuit to pump out the required currents anyway. On the subject of safety, even a normal 'isolated' SMPS might not be ideal. Most have their 0V line floating with respect to Earth, but have leakage currents and this can end up giving you a minor 'tingle' and sometimes a bit more when you contact it, some people may have experienced this when they touch the metal case of a non-earthed Set top box, DVD player, or similar (actually Silicon Chip mag did an article on fixing that problem some years back also). It's also best to ensure the SMPS case is Earthed, as they usually have small value suppression caps for EMC compliance running from the Active and Neutral leads down to Earth (the case) and so the case will have a fair potential unless properly Earthed. If using an SMPS, it would be best to get one that is rated for medical use, as this will have better isolation and less leakage and aren't that hard to come by.