Okay, I'm going to risk instant death and put forth a little theory of mine:
Danzo was meant to be the Third Hokage.
To boil down my reasoning as much as possible, here goes.
A: Let us first assume that the Second Hokage was going to choose the next Hokage out of the two teams he directed; his brother's (Saru, Koharu, Homura) and his own (Danzo, Kagami, Torifu).
B: Going by process of elimination: Torifu was an Akimichi and you really don't see them being leader types, Homura was too cautious and bookish, Koharu was a girl - this probably would have been more of an issue back then - and perhaps a little too impetuous, Kagami was an Uchiha and they really weren't trusted at that time.
This brings us to a choice between Sarutobi and Danzo. Imagine, for a moment, that you're the Second Hokage, there's a war on, with life-and-death on-the-spot decisions to be made every day and assassinations and subterfuge to watch for at every turn. Both of the boys have their own flaws, but which would cause the least harm in the situation the village is in? The overly serious, slightly fanatical about protecting the village, suspicious one? Or the slightly arrogant nice guy who tends to overlook things and lean towards pacifism?
...
During a war? Danzo, with all his flaws, all the way. Plus, he was the 2nd's student; the Second was probably planning to stay in office longer to train the kid and work through some of his problems, after which he would be excellent Hokage material.
So why, we must ask (or at least I must ask, as everyone gapes at me in disbelief) why was Saru chosen and not Danzo?
Why did the Second Hokage sacrifice himself?
Yep, it's a pertinent question.
Item A! As Danzo pointed out, the Second was the greatest ninja in the village, the Leaf's leader. Letting himself perish would demoralize the whole place and cause a whole lot of damage; in situations like these it is the honorable, done thing for one of the subordinates to sacrifice themselves for their leader. He would have known that. Also, to have him not even consider the option of ambushing the enemy? He was the most powerful shinobi in Leaf and had six madly talented young shinobi with him.
Item B! He doesn't address Danzo's concern about that matter. Instead, he cuts him off curtly with a reminder not to fight Sarutobi. He then proceeds to ignore the rest of them to give a little speech to Saru and then runs off. No orders for his team... no farewell... seems a little fishy, ne?
Item C! Hashirama and Tobirama both died young. Mystery surrounds Hashirama's death: how could a man that powerful have died in battle? The more logical explanation would be that he was murdered. He and his brother were both the kind of leader that usually gets knocked off by corrupt council members or just people that hate them. So... one can surmise that Tobirama was murdered too.
Item D! How could that have been accomplished? That kind of mind manipulation can be wielded by Yamanakas or... Uchihas.
Who in his team bore a strong resemblance to Shisui, who weilded a doujutsu that could have produced almost that identical effect? Who was the one who loudly stated that they would not ambush the enemy, and does not speak again for the rest of the scene? Who was kneeling in the semi-circle, with a perfect opportunity to meet Tobirama's eyes?
Yep. I think Kagami Uchiha did it in the forest clearing with a doujutsu.
Why? Either on his own behalf, or his clan's, or he was hired by the village elders or a foreign power. There are several possibilities. And as to what could be gained by Saru becoming Hokage? That's obvious. It drastically weakened Konoha's strength during wartime, slowing every movement. It made it possible for all sorts of dirty business to be carried out without anyone noticing. It placed a rather easily influenced and too-nice person in power, making it a prime situation for easy manipulation.
The only reason that Konoha survived, and not only survived but came out on top as the most prosperous village of the five, was Danzo. He basically decided to take matters into his own hands, build up his own task force (Root) and act as Hokage in many things.
Sarutobi's leadership and the way he handles threats is terrible. When they KNEW Orochimaru was hanging around the village during the chunnin exams basically saying 'yeah, I want you to do this and this and would somebody bring me a soft-boiled egg while you're at it?' his response was 'Ummm... maybe he's being hired by some other country... I think I'll divert all our forces there... no, we're not going to warn anybody he's here... and Aoba, could you take him that egg?'
:sy:
Oh, and if you want to know what Danzo did about the Orochimaru threat, that's a whole other theory... but I've probably rambled on long enough. I welcome opinions on my murder-mystery Danzo-was-supposed-to-be-the-third theory!

wease: Rude responses... well, if they're still referred to as 'flames' on here, I'll use them to fuel the Will Of Fire.
Now to go looking for myself! If I return before I come back, please tell me to wait.