The following post was moved here from a previous discussion...
Another site which offers manipulatives for telling a Bible story...
From Cathy Walz
A source for felt figures is www.bettylukens.com
They have hundreds of felt figures, objects, backdrops, etc. A book comes with it that gives suggestions on which figures to use with many, many stories from OT and NT. Even if a particular story isn't listed, you can still go through and pick out something that works. I'm amazed at how much they have--they even have a blanket filled with unclean animals (from Peter's vision).
When we do storytelling, the "character" doesn't spend the whole time telling their story as a 40 minute story would be too long. The children also do some sort of activity or simple craft that relates to the lesson (making a banner or bracelet, etc). They get their more "creative" art in the art station.