Of all the analogies used on this site, airlinesmustpay, your's just happen to be the worst. if the occupants of an illegal search realizes that money under a matress went missing, they'd have to prove the money wasn't hidden there because of something illegal i.e. drugs and/or a robbery. (police have been known to rob from drug dealers, etc) Most likely if they are drug users, they wouldn't report the case simply because they are dealers and don't wanna face time or fear of revenge of the cops who took the loot. Now if they did persue it, and the money was illegal to begin with, I do believe the city/state wouldn't settle with criminals (though i wouldn't be surprised if they did) and the officers would face serious charges. But ultimately the occupants of the house would have to prove there was a large amount of money under the mattress, and though the police did enter illegally, it would still come down to a back and forth he said - he/she said. It's actually deeper than how i put it, but it really is a bad analogy.
In the case of the OP, I do have doubts as well that the FA moved her bag full of valuables. In all my flights, I've seen the overhead get full, but never have I seen an FA take someone else's bag down and then move it to make room for others. When that happens those whose bags that do not fit in the overhead place them under their seats or they get tagged and placed underneath the plane OR the gate agent starts tagging bags before boarding because of the possibility that the space in the overhead will be limited. (this is usually done on the smaller planes). If an FA helped the OP put her bag in the overhead then there is no reason for staff members to start takin stuff down to make room. Make room for what exactly? Someone else's bag? That'd be stupid.
Do I think this tale is exxagerated and the contents of the bag inflated? Oh yes definitely. Why? Money that's why. People have done crazier things for money, especially when dealing with a huge corporation:
http://www.smh.com.au/news/World/Wen...152355086.html (Woman chops off finger)
How much of a loss are we claiming here? thousands? millions? This is gonna be a tough case, but one that will work in the airlines favor. They may settle but for far less than what the OP is asking.