Before the story, a brief Halachic briefing. Everyone must give the proper "kavod" to a Sefer Torah or any other holy scroll and many customs we have today are a reflection of this Halacha. That's why we keep the Torah in a special cabinet, the Aron Hakodesh, and also why we all stand when the Chazzan carries the Torah to the Bimah for the Parshat Hashavua reading. Most rabbis say that one shouldn't take out a Sefer Torah from the Aron just to show it to visitors, another related Halacha.
Specifically pertaining to the holiness of a Mezuza, I've seen a discussion about a case where the gentile king or ruler requested a Mezuza for his house or palace. Some rabbis were very much against it since we fear for the Mezuza's "kavod", while others like the Rema permit it on the grounds that sometimes we make exceptions for the fear that turning down a royal request will create unnecesary tensions ("Eiva" in Hebrew). That's exactly what happened in Zaragoza, in the 15th century.
I quote a better story-teller:
"Scholars still debate the location of the story. Many favor Siracusa (Syracuse, on the island of Sicily) as the location of our story some 600 (1421) years ago. Others refer to Saragossa, Spain as the location. In any event, The Jewish main street of the city contained 12 synagogues. At the annual royal visit three Torahs dressed in gold and silver were taken from each synagouge to welcome and parade the King through the town. One day the leaders of the community decided that the practice violates the sanctity of the Torah and that henceforth the Torah containers would be marched dressed as before but empty without the Torahs. The practice went well for 22 years.You can read a longer version of this story on the Chabad site.
One day an apostate by the name of Marcus at a royal meeting revealed the secret. The King in a fury ordered a surprise inspection the next day and the slaughter of all Jews if Marcus is indeed correct. That night the Prophet Elijah appeared in the dreams of each of the 12 sextons and ordered them to insert the Torah in the empty cases. The next day, upon finding the scrolls in the containers the King ordered Marcus executed and relieved the Jews of taxes for a period. As a result of the miracle, the scroll was written and the 17th of Shevat celebrated as the Purim of Saragossa or Siracusa, still o bserved in many Sephardi families to this day."
And the best part, we have some great pics from this rare Megilla! (credit goes to the Foundation for the Advancement of Sephardic Studies and Culture. Be sure to check the stories of other less known Purims here and here)