I came across this excellent resource that was posted on the blog of Kevin Jarrett. It is a digital story tool developed by Carnegie University. It is called My Story Maker.
My StoryMaker is a free, easy-to-use, Flash-based interactive story development platform developed by The Carnegie Library of Pittsburgh, with the generous support of Carnegie Mellon University and The Grable Foundation. The basic idea is that you start by selecting characters and a goal:
You then are given an editor and a guide to help you build the story.
All you have to do is drag and drop and arrange the objects where you want them. You can add dialogue and pages to your story. Once you build your story you can choose to share your story. This will generate a six-digit number that can be plugged into the Main Site to search for the story. You also have the option to print you story. It prints as a foldable book and can be printed in color. The site does not require any registration. You just visit the site and start your story.