The Infrared emitter in the occupancy PIR sensor will be interfering with the sensor in the Hand Dryer that detects the motion of hands going into the drying area, it may well be getting reflected off of a mirror or chrome pipe/tap/towel rail....this will be random depending on condensation etc....
Try moving the PIR sensor to redirect the sweep of the beam to where it still catches occupancy motion to keep the lights on with the timer....this should stop the Hand dryer from randomly going on....