The source and several other friends told ghost stories on a camping trip to Joshua Tree. This was told as if it was going to be a ghost story.

This is a true story. In the late seventies, in Seattle, a baby was born with a very unusual condition. Where his belly-button should have been, there was a golden screw—just the head sticking out. The doctors couldn’t make heads or tails of it. They ran x-rays and tests; they tried gently pulling the screw out; but they had to conclude that there was no way to remove the screw safely. The child would live with the screw and his mother was just thankful that he seemed to be healthy otherwise.

Well this boy—his name was Dave—grew up and he began to realize he was different from the other children. He was embarrassed to take his shirt off in the school locker-room and at the pool. And when they found out the other kids teased him and called him ‘screw belly.’

Dave decided that as soon as he was 18, he’d venture out to find out why he was so different from everyone else.

I’ll abridge this part of the story. Dave sets off to find an answer, ending up deep in the Amazon Jungle at a mysterious clearing and climbing down a giant stone funnel to reach an underground golden room.

In the middle of the golden room was a golden pedestal and on top of that was a golden screwdriver. Dave knew what he had to do. He took the golden screwdriver and lifted his shirt. It fit perfectly into the screw in his belly. Slowly, he turned the handle and to his amazement the screw began to come out. Turn after turn, the screw unwound. One inch… two inches. It was longer than he ever imagined. Finally, with a final turn, the screw fell out of Dave’s belly.

And then his butt fell off.

This is a classic example of a shaggy dog joke, a story that takes a lot of time to get to a silly punchline.

On the web, I’ve found many different versions of the joke – with the same punchline but different details in the middle:
https://kellybarnhill.wordpress.com/2012/08/05/the-tale-of-the-young-man-with-a-golden-screw-in-his-belly-button-spoiler-alert-his-butt-falls-off/