I would like to echo Bruce Steinert's reply to Ronald Polizzi's
question.  I am located at a hospital based program as well and have
encountered the same request.  We have tried to do the grant writing for
some of the "too busy" staff.  The critiques have all come back saying
that it was obvious that the PI was not involved in formulating the
application to a serious degree.

If the potential PI is too busy to create the scientific portion of the
application, then what kind of job will they be doing on the research?
We do the same thing with regard to taking care of the formating,
grammar, administrative information, budget prep, etc.  It is the PI's
responsiblity to create the real part of the application.

If you do employ a grant writer, I would suggest that those applications
be limited to foundations that do not have a strong scientific review.
Industry is just as stringent as the government agencies in their review
and find a foundation that does not have a strong review committee will
be work in itself.