Can you recount the story from the Sai Satcharitra about the doctor from Malegaon and his nephew's incurable disease?

Certainly. Chapter 34 of the Shri Sai Satcharitra tells the story of a degree-holding doctor from Malegaon whose nephew suffered from a terrible bone-cyst, or Hadyavarn. Despite the doctor and his expert physician friends trying all known native and foreign treatments, including surgery, the ailment could not be cured, and the young boy was in great pain. After exhausting all medical options, the family heard about the great saint Sai Baba of Shirdi. As a last resort, they traveled to see him. Upon hearing their plea, Sai Baba, the embodiment of compassion, reassured them, gave them His Udi, and instructed them to smear it on the wound, promising that their worries would end.