I'm sure something like that's been done. There's a magazine that has a custom pc build on the cover of every magazine (Maximum PC? CPU? I forget). They do some pretty outlandish things, like put lava lamps in the liquid cooling portion. (Alright, I haven't actually seen that done, but I still think it has been.)
Um...not sure I agree with Monsieur Baguette de la Aardvark. I do agree with his general principle, and to the conclusion, to a certain extent. But if you go so small as to basically bleed the cooling directly to the outside, I do think small is good. To wit: HP Voodoo Firebird something. Factory liquid cooled computers with 1333 FSB == rockin'.