But in the end, after a major metropolitan police station was evacuated, two police officers were taken to hospital and a man was arrested amid terrorism fears, its suspected maker revealed it was nothing more than a homemade sex toy.

Forensic testing will now help police confirm whether the man behind this puzzling item, found during a raid in Sydney's south-west, was honest in his claim that his craft had nothing to do with explosives.

Despite the bizarre case of mistaken identity, formed after advice from the NSW Police bomb squad and Fire and Rescue's HAZMAT unit, police are still trying to answer one question.

If it wasn't a bomb made with volatile and toxic chemicals, why were five officers involved in the search that uncovered the mystery item struck down with burning skin, irritated eyes and vomiting?

The saga started on May 26, a Friday night, when police officers from Liverpool Local Area Command raided a home in Casula over alleged drug activity.

During the search of the Casula Road property, police found a putty-like substance with what looked like a switch device, wrapped in plastic.

Fairfax Media has been told the bomb squad was initially contacted but didn't examine the strange item until the following day, after it was taken to Liverpool Police Station.

After studying the item, an officer from the bomb squad - according to police - determined it was a live incendiary device.

Advice from HAZMAT backed this view and warned that the putty was shock sensitive and likely to explode if moved around.

However, this advice was received after officers involved in the raid carried the supposed crude bomb with them back from Casula.

It is understood half of Liverpool Police Station was then evacuated while the bomb squad undertook a controlled detonation.

At the same time, some of the officers involved in uncovering the item were struck with similar symptoms, including dizziness and vomiting.

Fearing chemical exposure had something to do with it, ambulances were sent to the homes of other police officers. Two were taken to hospital for treatment.

Believing they had stumbled across a homemade bomb, police later arrested the target of the raid - who wasn't home at the time.

A counter-terrorism officer was also brought in amid concerns about the maker's intentions.

However, those fears were allayed when the arrested man - a construction worker with a penchant for fast cars and motorbikes, according to social media - sheepishly claimed it was actually a homemade sex toy.

The putty and the electrical component inside were meant to vibrate, police were told.

The man was released without charge while the putty was sent to forensic experts for further testing.

"At this stage a person had been interviewed and the chemical is still being forensically examined," Liverpool LAC crime manager Detective Inspector Dean Johnstone said.

"The general feel is we believe it was some sort of sealant but we're not sure what else was contained in it.

"He has given us a version but based on that we need to see what the chemical make up is."

Detective Inspector Johnstone said the forensic experts weren't taking any chances and would examine the putty further.

Meanwhile, the officers who suffered dizziness and irritation after the search, were on the mend.