Ok, here is a proposed design I am toying with, there may be better component choices.
Image may be NSFW.
Clik here to view.
The zener is a fast acting type at 3.6V. The "fuse" is a PTC with trip time 0.2s at 290mA, hold current is 120mA. Cost per input easily less than a $1.
To be clear on the goals, the circuit should protect against transient ESD spikes without damage. In case of short to 12V, the circuit should protect against damage to Arduino at the cost of damage to the protection circuit.
I will run the design past my colleagues on Monday, they seem to find these little challenges entertaining :)
Image may be NSFW.
Clik here to view.

The zener is a fast acting type at 3.6V. The "fuse" is a PTC with trip time 0.2s at 290mA, hold current is 120mA. Cost per input easily less than a $1.
To be clear on the goals, the circuit should protect against transient ESD spikes without damage. In case of short to 12V, the circuit should protect against damage to Arduino at the cost of damage to the protection circuit.
I will run the design past my colleagues on Monday, they seem to find these little challenges entertaining :)