It was destroyed not by the Evil Empire but one of its own citizens, who gained access to the mayor's account and deleted the city. Apparently this was because he didn't like a new guild that moved into town. But just before he hit the delete button, someone seems to have emptied the treasury.
For the sordid story see:
This thread on the SWG Shadowfire Board
Mos Muerte was also the site of the Kenobi Memorial Clinic, and the original home of Merlin Meds. The hospital was removed after desert demons and evil settlers started making a habit of hanging out around the entrance, and we were kindly offered the opportunity to relocate to Mos Vegas.
March 27, 2004
Aurelius Pendragon
Master Doctor