Has anybody out there ever done this or have any information about it?

I'd also take precautions regarding personal safety as foreign travelers have been targets of kidnapping.

Travel.State.Gov
Mexico-Country Specific Information

THREATS TO SAFETY AND SECURITY: Violence by criminal elements affects many parts of the country, including urban and rural areas. Visitors to the U.S.-Mexico border region, including cities such as Tijuana, Ciudad Juarez, Nuevo Laredo, Nogales, and Matamoros should remain alert and be aware of their surroundings at all times. In its efforts to combat violence, the Government of Mexico has deployed federal police and military troops to various parts of the country. Checkpoints have increased in border areas. U.S. citizens are advised to cooperate with official checkpoints when traveling on Mexican highways. Sporadic outbursts of politically motivated violence has occurred from time to time in certain areas of the country, particularly in the southern states of Chiapas, Guerrero and Oaxaca.

For the latest security information, Americans traveling abroad should regularly monitor the Department of State, Bureau of Consular Affairs� website . Travel Warnings and Travel Alerts , as well as the current Worldwide Caution , can also be found at that site."

Two links that might be useful:

travel.state.gov/travel/cis_pa_tw/cis/cis_970.html

www.zillow.com/wikipages/MEXICO--
Ten-Rules-to-Buying-Property-in-Mexico/

Re: safety... this is a huge issue, but if you pick the right area, you'll be fine. The Yucatan is extremely safe, more so than most American cities.

P.S. Here in Canada, we're seeing advertising for homes in Florida "for the price of a car" !! I'd be wary of that too.

Sometimes it works out well, other times the gringos get screwed over and there is no recourse.

Foreignors can buy property with full ownership if it is not in the "restricted zone", most foreigners want to buy in the restricted zone. I copied this explanation:
The Restricted Zone in Mexico is set up as such in the Mexican Federal Constitution. It is: (1) the land area within 100 kilometers of Mexico's international land borders (with U.S., Belize and Guatemala) (all of the border towns and a little more); and (2) the land area within 50 kilometers of Mexico's ocean front areas (the coast line of Mexico).

In the Restricted Zone foreigners to Mexico can not own direct (fee simple) title to real estate located therein. They can however hold the title thereto via the long term irrevocable bank title transfer trust. I own property in such a trust as do many Canadians and Americans. It is not a lease, and title is not a problem. Also safety problems as shown is not a problem in many desirable areas.
I won't be buying in Juarez or such a place, but many other areas have no drug cartel activity. Also I would never buy a condo under construction in Mexico, the rule is don't buy unless you can see it, touch it, feel it. People do buy beautiful models but don't get that quality in the bought unit. Never pre buy. Personally I would not buy in a condo, only where I can control all my property and building.
$300k for beachfront property sounds too cheap to be true or highly desirable. Maybe a condo, but land and house?
Chapala is fee simple property, this is where the largest group of foreign population live in Mexico. Personally I didn't care for it, but many love it.

This land had been purchased by a developer who had built a large subdivision catering to US citizens.

The developer had gotten some signatures for the sale of the land but had not gotten around to all the heirs, which I think had been close to 100. Of course they all had different reasons why they had waited to come forward until the subdivision was almost completely built out.

After several years the case was finally settled in the landowners favor. Many of the homeowners ended up re-purchasing their homes.

I don't know what their legal system is like, but I would find a reputable, real estate lawyer who practices there and have them assist you!

I think you are referring to the Punta Banda fiasco. It was in litigation for years, during which time Americans still chose to buy long term leases in the disputed development. When the Mexican courts ruled in the legal owners (Mexican)favor there much much publicity on the US television about Americans losing their property in Mexico. They didn't tell the whole story as I mentioned above. From what I've read, too many Americans were told by "American" attorneys they could prevail in court, of course these attorneys were taking the Americans money while making promises they cold not fulfill and it appears the Americans were buying into what they wanted to believe. The discussed land was Ejidal land, it cannot be bought with a land trust.
Buying in Mexico does have plenty of risk, one needs caution, but it does have laws and there are legal remedies, just as in the USA.
I bought land which had a squatter, I did legally buy and own the land and did prevail to kick off the squatter.

That said...buying in Mexico (even if possible) brings two words to mind: Drug Cartel. They seem to control the country.

That being the case, I personally would not live in Mexico at this point in time even if you gave me a house for free.