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I know for sure that SEGA of Japan did program a Mega Drive emulator for Saturn. If you check the Sega Ages Disney Collection feat. Quack Shot and Castle of Illusion, you will notice that Castle of Illusion is a regular Mega Drive ROM that can be run in any emulator like Gens or Kega. They apparently used variants of this emulator in the Thunder Force Gold Packs, the Phantasy Star Collection, and Sonic Jam.
I'm not sure it was emulators.
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- If you were to use FAZE to emulate the Z80 at a very, very low underclocked rate, and use the Saturn's M68000 to emulate the Mega Drive's CPU, I think you could get it up to a playable speed.
Sound and video emulation would still be a problem...
I would be worth to try with FAZE & FAME, I don't really see how to use the Saturn 68k to run the 68k MD opcodes.