Yeah, a Muppet takeoff on the Sword and the Stone and the rest of the Arthurian legend would be kind of neat. And as I recall, for one special the Muppets did do a spoof of the Three Musketeers.
This probably belongs over in the fan fiction slot, but I'm trying my hand at doing a story in which the Muppet gang puts on a spoof of the story of King Arthur. In this case, it involves Arthur, Guinevere, Merlin and the principal knights, who try to foil an attack by Mordred on Camelot.