Hi,
Well, the rust appears to be the main culprit, probably water combined with corrosive powder residue.
Someone did some cleaning on the luger earlier and I guess it was pretty much a solid brick of rust when it was originally recovered. There are traces of crude removal of the magazine as well, causing the obvious damage to the grip and mainspring area.
As for legal ownership issues over here: I'd have to do some additional checking, but I guess it's even obvious to the untrained police officer that this is no longer a functional side arm. Worst case scenario is that I'll have to split it in half (through the center).
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