Yes....We have used Milorganite for years, BUT, not for what you are trying to achieve. I am in the landscaping industry and a big part of our business is fertilizing and weed control.
Soil needs the correct balance of nutrients and micro-nutrients to allow cool season grass to stay healthy, it should have a balanced fertilizer applied at the correct rates through out it's growing season. Milorganite contains a high amount of Iron (4%) which is needed as a micro-nutrient in soil and it will also cause the turf to green up "IF" it is lacking in Iron but Milorganite is very low in the primary nutrients (N P K) only 5% nitrogen 2% phosphorus and 0% potassium. The nutrient a grass plant uses most of is (N) nitrogen, and without getting to technical, most mix's of cool season grasses need about 1lb of nitrogen per 1000 sq ft per growing season. So having said that, you can use Milorganite to fertilize your lawn, however, for your lawn to get the correct amounts of (N P K) you will have to apply it much more often which makes it a VERY expensive way to fertilize your lawn apposed to the more conventional fertilizers.
The bottom line is, in our industry, generally speaking, Milorganite is used to add iron to soil that is lacking in iron.
As far as your concern of contaminating your ground water? Well let me just say fertilizing your lawn correctly and responsibly is far less of a threat to your ground water than you might think it is, It's the irresponsible fertilizer applicators, be it a farm, golf course, or a landscape business like myself cleaning out there pesticide tanks or containers in a un-lawful manner or excessive spillage of pesticides in and around there filling site or applying over the recommend rate, that is the biggest threat to your ground water, because your well draws it's water from a under ground aquifer and that aquifer that your well draws it's water from can be the same aquifer that is being contaminated from miles and miles away even though you never put a drop of pesticide on your own turf .