I finally scanned some old pictures from the puppet and drama workshop at Palma Ceia Presbyterian in Tampa, FL. Hope these inspire some other workshops! - I look forward to seeing everyone else's pictures!!
Gathering spots: We set the scene for classtime by gathering in a synagogue as the early Christians did to hear tales from the Old Testament and also to hear stories about Jesus and the Apostles. (We attached a triangular pediment and unhemmed fabric curtains to a high shelf. A box was spray-painted gold and put on a lower shelf for the Ark. [oops. not accurate to have the Ark in a New Testament synagogue. what was I thinking???] We hung a flowerpot for the eternal flame - if I were doing it now I would add one of those nice battery powered realistic candles! A church member built the benches for us.)
We also had a tent where we could gather as wandering nomads around a campfire in front of a tent. Tent was also used when acting out some stories. It sometimes served as a house. (Tent is fabric over PVC pipe. But you could just put a blanket over chairs.)
Puppet stage: We built a PVC pipe frame and covered it with fabric.
For backdrops the kids decorated white sheets (early arrival project; I drew the outline and over the four or five weeks of the rotation the backdrop would get more filled in.)
We would do warm-up exercises with the puppets while we were still sitting talking about the story.
But a table and tablecloth work as a puppet stage just fine.
Flat white sheets also make good backgrounds for drama, too! The hem makes a good pocket to slide onto a curtain rod. Or thumbtack it to the wall (or we had room dividers that were made to have things tacked to them).
But you can do drama without any sort of scenery or backdrop.
We were fortunate that our classroom already had a nice closet for hanging costumes (and storing puppets - the hand puppets are supposed to be sitting on the plungers at the top of this picture). Props and headscarves and accessories are in laundry baskets on the floor of the closet.