what does "if you were Pinocchio right now and we could saw off your nose and have enough firewood to last the winter" mean?

Answer 1

It means that the speaker is addressing a person he considers a big liar.

Maybe he's talking to a politician???

I assume you remember the story of Pinocchio.

Answer 2

Maybe not:

http://en.wiktionary.org/wiki/Pinocchio

Answer 3

That means when his nose grew with lies, he can just cut off his nose to make it short again and put it in the fireplace.