Yup, this happened twice in my 3e campaign. Both times it was "Weapons of Legacy" that they didn't recognize for what they were.
Using Identify on a WoL only reveals that it is a +1 item of its kind. It requires a successful History check to tell what it really is. However, usually, their unusual appearance is a dead giveaway.
The first had been wielded by a Vrock bard and was a custom creation based on an improved version of a Balor whip. I described it as being crafted from five differently coloured strands ending in five separate tips (four of them were actually made from cold iron, silver, demonic and angelic skin allowing it to overcome most types of DR).
One of the pcs was actually a Lasher (a prestige class focusing on fighting with whips) and carried the whip around for several sessions without thinking to investigate it further before finally selling it along with other loot.
When I later asked the player about it, he told me he had looked through all books and decided that there simply wasn't any kind of whip worth finding :-/
The second was
Exordius which I had turned into a warhammer and modified a bit. It was suspended by two chains over an altar of duergars and had been the favorite weapon of one of their champions, an infamous death knight.
Whenever someone with a good alignment came close to the hammer, silvery tendrils of spirit matter would slowly start curling towards her. Apparently, this made the paladin player so nervous he decided not to approach it. Several other pcs with non-good alignments approached and handled it, but to them it didn't react, so they left it alone.