We used the terrific Storytelling lesson plan above, using the book Mary's Treasure Box.
We used this lesson as the first in an "Epiphany" set of workshops: The Magi, Simeon and Anna, The Baptism of Jesus, and The Miracle at Cana. The kids loved it. One of our families lives in the country and brought in our wool ... unwashed, with the barnyard smell still clinging to it. I had tiny plastic bags for the wool (and frankincense and myrrh) for anyone offended by the smell, but it was a great opportunity to point out to the kids that Jesus was born in a place that smelled *just like this*. Not much left to the imagination!
Editor's Note: the book has since been reprinted, but with new pictures, same storyline.
UPDATE: that edition also seems to be out of print, but is available used.