I always mitigated fumbles in my games by giving the player a choice of what happens. Basically, on a natural 1, you DO fumble. But as to what, the player can choose:
1) Blood from combat has splashed onto/leaked down onto the hilt of your weapon, and your powerful swing causes the weapon to slip out of your grasp and fly a full move action in a random direction away from you.
2) Your weapon has lasted well through all your adventures, but finally it cannot take anymore. It snaps, breaks, bends or otherwise is damage to the point of uselessness (although it still can be repaired). We also always ruled that magical and masterwork weapons are immune to this effect.
3) Your powerful attack misses, and your weapon becomes lodged in a nearby piece of furniture/tree/corpse. You must take an attack action to remove it properly without damaging it.
4) This one is for Ranged weapons only - congratulations, you miscalculated your ammunition, and you have run out faster than expected!
5) In the heat of combat, you loose your footing. Maybe you slipped in a patch of blood, maybe you stepped on a corpse and rolled your ankle, maybe you over-swung your heavy weapon and lost balance (or your opponent took advantage of that to trip you). Regardless, you end up on your back and prone, although you are still armed and can act as normal from this point on.
Basically, I let the character's player choose which effect they wanted as suited the situation (and the characters ARE supposed to be master warriors after all), and we rolled on from there. Every now and again - depending on the unique situation of each combat - players would come up with their own instead and we would substitute that instead ("well, I fumbled my attack roll while swinging from a chandelier - can I have the chandelier rope break and it comes down with me, raining everyone in 30ft with shards of broken glass?").
The idea was that we all knew that a fumble resulted in something bad, but what it was would depend on story, cinematics and the players. But you do need a mature/cool group to use this type of house rule with.