This seems like a case of exaggeration, judging by the reaction. A war; that sounds insane! But having said that, if I were a devout Muslim and see an image of the Prophet 'misrepresented' in a daily, I wouldn't be amused one bit.
Freedom of Speech and autonomy of the Press is crucial, giving them the right to print and speak one's mind. But certainly the Press has an obligation towards the masses whereby it doesn't offend anyone and exercises its liberty with a good measure of caution.
I can recall one or two cases similar to this one where Hindu deities have been 'misrepresented' in various forms; mainly in the West. In fact, Hindu deity's images are rather prevalent in the genre of rock music. But the situation, I believe, never went off hand and turned into a crisis.
I guess Westerners should look more carefully at the religious and cultural significance behind the imagery, rather than just plainly opting for a religious imagery of some kind to make a statement.