This is not exactly what you're asking for (media inside media), but it's really close in spirit (nested narratives), and I really like it: a book written in Portuguese in the XIX century, called Noite na Taverna (Night in the Tavern).

The book has an overarching story of friends telling each other stories in a tavern, over booze; with all those nested stories being about love, despair, and death (it has a strong gothic vibe).

And, as each character tells the others a story, there's always that fishy smell that the story might be actually bullshit; and other characters do raise some doubts about its in-universe veracity (like Bertram does to Solfieri). And you, as the reader, do the same - but in no moment you question the veracity of the overarching story, and you feel like you're inside the tavern alongside the drunkards.

So it's a lot like the author is toying with your suspension of disbelief - redirecting it from the overarching story to the nested stories, and as you doubt the later you get even more immersed into the former.

If I must use an example of media within media, then my choice would be "The Book" within Orwell's 1984. I think that it's a great piece because it shows Orwell's views on politics and society, while still serving narrative and worldbuilding purpose - for Winston it's a material proof of the Inner Party's bullshit, for O'Brien it's a tool of the Inner Party to sniff out dissidence. (Note: 1984 is extremely misrepresented nowadays, I'm aware, but I still like it.)