Donald Qualls , Feb 20, 2004; 11:16 a.m.
The "mixed silver-iodine sludge" obtained by using steel wool to precipitate dissolved silver from used fixer should work very well for reprocessing into silver nitrate -- the trick is to take up the iodine in some manner before reacting with the silver nitrate. One simple way to do this would be to first react the sludge with a slight excess of sodium hydroxide (very hazardous stuff, but not much more so than nitric acid). The solution need not be strong, it just needs to replace the hydroxide in solution with iodide, and 0.1 Molar should suffice. The sludge can be washed with hydroxide solution until the solution remains alkaline, and the resulting sodium iodide solution can, if desired, be evaporated to give the iodide in crystal form for easy disposal.
The remaining material should be pretty pure silver, probably pure enough to work well with nitric acid to produce silver nitrate. I've considered this process myself, though I don't have any exhausted fixer yet to start with (and the quantity obtainable is tiny). The nitric acid need not be concentrated; 0.1 Molar solution ought to be more than strong enough (though the resulting concentration of silver nitrate in solution will be low, it can be concentrated by evaporation -- boil off the excess water), and is safe enough to be used in first chemistry courses in high school, probably no more hazardous than 28% acetic acid used for making stop bath. Just add nitric acid to the washed sludge, with stirring, until no more sludge dissolves (you may leave some iron oxide behind -- it won't react with the nitric acid and you won't want it anyway), leaving a slightly acid solution (which can be neutralized with a little of the sodium hydroxide solution not used for the wash step).
Key here is that neither hydroxide or acid needs high concentration -- weak solutions are much safer to work with. Even so, wear chemical rated gloves (either solution under a nail can cause a nasty burn) and eye protection (even weak hydroxide can cause serious eye damage, possibly without telltale irritation until after the damage is done; nitric acid will stain the cornea, though it's not as bad as hydroxide).