It comes from a text called the Life of Adam and Eve, which dates to between the third and fifth centuries CE. Here is the relevant portion from the Latin version of the text (it's known by other names also, including the Apocalypse of Moses, the Penitence of Adam, and so on; the Latin however is known as the Life of Adam and Eve):
"And Michael went out and called all the angels saying: 'Worship the image of God as the Lord God hath commanded.'And Michael himself worshipped first; then he called me and said: 'Worship the image of God the Lord.' And I answered, 'I have no (need) to worship Adam.' And since Michael kept urging me to worship, I said to him, 'Why dost thou urge me? I will not worship an inferior and younger being (than I). I am his senior in the Creation, before he was made was I already made. It is his duty to worship me.' When the angels, who were under me, heard this, they refused to worship him. And Michael saith, 'Worship the image of God, but if thou wilt not worship him, the Lord God will be wrath with thee.' And I said, 'If He be wrath with me, I will set my seat above the stars of heaven and will be like the Highest.' And God the Lord was wrath with me and banished me and my angels from our glory; and on thy account were we expelled from our abodes into this world and hurled on the earth." - Life of Adam and Eve 14:1-16:2
The text is generally regarded as having originally been a Jewish work but was significantly added upon by Christians. Like other books of its kind it was probably somewhat popular since it dealt with topics which would have interested ancient Christians but was likely taken with a large grain of salt. Nothing in the work is heretical, it's more-or-less an expansion of the the Eden narrative, though in some cases goes against some more standard Christian thought. An example of this is that the serpent is not Satan himself, but rather the serpent and Satan work together to tempt Eve, Satan actually stands by the tree disguised as an angel in order to trick her; and actually later in the text tricks her again when her and Adam agree to repent before God by standing and praying in separate rivers.
It's an interesting text, though little more.
As far as I know it's the earliest account of the notion that Satan was expelled from Heaven in part for refusing to follow God's command to bow before God's image (man).
That, however, has never been official Christian teaching, though there's no reason why it would be forbidden from being believed (though, I'd argue, there's no good reason to believe it from a Christian viewpoint).
What the priest said was most likely simply his personal view, it is not representative of official Christian teaching, Roman Catholic or otherwise.
-CryptoLutheran
