Ian,
Very interesting story that came along with this pistol. Thanks for sharing!
I remember to have read something about Luger in use by Luftwaffe bombers aircrews during the first stages of the war. I think this is mention on John Walter's "The Luger Story". Most of the small pistols went to the fighters pilots, as the Bf-110 heavy fighters and bombers like the Ju-88 and He-111 had more room for bigger pistols.
As said above, I would put it in a bax, together with some Luftwaffe insgnia or even some parts of a BF-110. It would make a beautiful display.
At last, you can try to find more information about both planes at this forum:
http://forum.12oclockhigh.net/forumdisplay.php?f=8
There are some very serious researchers there and I'm pretty sure that can add more information about this incident.
Congratulations and once more thanks,
Douglas