I can't find this film anywhere online, nor does anyone I have asked have any recollection of such a story.
The crucial plot point I remember is this:
Near the end of the movie, the villain (assumedly Mordred), frustrated with his inability to wield Excalibur (due to it burning his hand as he is not the rightful wielder), chops of his own hand and welds Excalibur to his wrist. I have a particular memory that he had the ability to spin Excalibur when it was in this state.
This movie must have come out more than 10 years ago, since that is roughly when I remember seeing it.