Murudeshwara town is in the Bhatkal Taluka of Uttara Kannada District in the Karnataka State, India which is located 13 kilometers from Bhatkal. The Shiva Temple in Murudeshwara has the world’s second tallest Shiva Statue of which Murudeshwara is famous for.
It is believed that worshipping the Divine Shiva Linga called the Atma-Linga is a means of attaining immortality. Ravana, the Lanka King wanted to attain immortality after obtaining the Atma-Linga from Lord Shiva. There was one condition on giving the Atma-Linga to Ravana that it should not be placed anywhere on earth before he reaches Lanka. Otherwise it would be impossible to move the Linga if he placed it anywhere else. Ravana started to Lanka, carrying the Atma-Linga.
Lord Vishnu, who came to know about Ravana obtaining the Atma-Linga feared that Ravana would misuse his powers and create havoc on earth. So, he approached Ganesha, son of Shiva and Parvathy and asked his help in preventing Ravana taking the Atma-Linga to Lanka. While Ravana was near Gokarna (a temple town in the west coast of India in Uttara Kannada), Vishnu made an illusion of Dusk by bottling out the Sun. Ravana being a highly devoted person of Lord Shiva felt that it is time to do his evening prayer. But he was unable to do the prayers because he the Atma-Linga was in his hands.
Ganesha comes to help
At the very same time, Ganesha, disguised as a Brahmin boy came to Ravana and asked if he needed any help. Ravana thought he can entrust the Atma-Linga with the boy and do his prayers. He told Ganesha that he should not place the Atma-Linga on ground on any circumstances. Ganesha agreed but told Ravana that if it becomes difficult for him to hold it, he would call Ravana thrice and only if Ravana fails to come, he would place it on the ground. Ravana happily went to perform his prayers.
When Ravana returned after his prayers and found that the Atma-Linga was kept on the ground and the boy was not to be seen. By then Vishnu removed the illusion and it was daylight once again. Ravana realized that he has been tricked. He tried to uproot and destroy the Atma-Linga. Ravana was so powerful and due to the force, some pieces of the Atma-Linga were scattered.
Different parts in different places
It is believed that one piece from the head of the Atma-Linga fell in the present Surathkal (in the Dakshina Kannada District, in the northern part of Mangalore). A temple named Sadashiva Temple is built around this piece of Atma-Linga. Another piece fell some 37 kilometers away in a place called Sajjeshwar and others fell in Guneshwar and Dhareshwar. The cloth covering of the Atma-Linga was thrown to a place called Mrideshwar in the Kanduka Hill. It is Mrideshwar which was later named as Murudeshwar.
You can read more about Murudeshwara Temple here