Connie - that's a great idea, especially for those of us that are "artistically challenged". I know at our elementary they have a document projector teachers that projects a large image of a page on the wall for tracing on poster board or craft paper. Similar to an overhead projector, but you don't use transparency sheets. It projects from the paper version. This is really old equipment. I think they've had it 15 or 20 years, so I think it's pretty common.
But copying the image onto overhead transparency would be easy, too.
I have a great idea and its beening passed down from our Principal. After hand drawing all my characters for my book fair she told me why don't I use the overhead projector. WOW, what a time saver that was. I now copy what I want to use on an overhead sheet and then project it to my plywood and paint at the same time. Now all I have to do is cut it with my saber saw. We now have a space ship that the kids throw a frizbee through the hole in the center, a Panther that has pegs glue to and use for ring toss. Good Luck.
The only place I know to buy some of these cut outs is from an artist. I looked for months to get some for our market, and then made them myself. I have an art background and it was an easy and fun project. good luck to you all.
Have you considered enlisting the assistance of the school's art teacher? Ours has been such a dream. We set up a station at all dances where the students can have an instant photo done. The art teacher volunteered to do all the various backgrounds for us---they were wonderful. This could be translated into doing the art work for the cutouts with perhaps, a dad doing the hole cutting. Also, our custodian has been a lifesaver for us on numerous occasions--just ask around your school--you'd be surprised who wants to help.
We have a Hula girl and some flower petals, that were both painted by different talented parents. We use the flower ones for pictures and the Hula girl for a sponge toss. I'm thinking it might be big money for bought ones, but I understand they need to look professional, fortunately ours do. Good Luck, please post again if you find some.