The Postcard Cache by Fresh_Meat (GC9660) is an example of this kind of cache. It is still active, having been "grandfathered" in by the folks at Groundspeak. Since it was based in Oregon, I have occasionally monitored its progress.
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On July 22 this cache was picked up by none other than my old friend "Stumpy". For whatever reasons, he chose not to follow the rules of the cache and report its actual location. He instead chose to hang onto this cache and take it to an event he was hosting on August 18. Once there it was logged by several attendees. No one at the event chose to follow the cache rules and report its current location.
The owner of the cache made several attempts - the last one on August 31 to convince whoever is holding it to please provide the coordinates. I left a note on the cache page, informing him of the event that it was recently seen at, so maybe he will be able to track this cache down.
We in GOWT had a "traveling" members-only cache that worked in much the same way. It too, was reported as picked up and then never reported as being put anywhere. When people like to talk about participating in geocaching following their own personal idea of "house rules", they need to realize that we don't all live in the same house.
Update: September 5, 2007: Another geocacher will be picking up the cache from Stumpy to take to another event on September 15. Maybe someone at the next event will choose to follow the rules specified by the cache for logging.