Scrubs: My Princess Bride
The last episode of the NBC sitcom "Scrubs" to air this year, "My Princess bride," (you can read the recap here: http://www.televisionwithoutpity.com/show/scrubs/) makes a pretty classic fairy tale retelling. Although the title points to the movie "The Princess Bride," the episode doesn't so much riff on the movie as tell as its own fairy tale.
In the episode, the character of Dr. Cox tells a story to his son, Jack. In the story, he converts all the characters in the show (who are doctors and nurses at the hospital Sacred Heart) into magical characters in the land Sacred Heartia: the Janitor becomes a giant, a nurse an angry villager, the lawyer a deformed monster, etc. Every character's fantastical counterpart is some reflection on their real world personality: for instance, a couple, Turk and Carla, who are annoyingly joined at the hip, become "Turla," a witch that is two witches stuck inside one body.
The episode deals with a quest to save a Princesses' handmaiden from an evil monster (typical, right?: a curse that needs to be lifted). Several attempts fail, and the characters need supernatural aid to finally lift the curse. In the end, it is some wood nymphs that accidentally provide the answer.
In episode, we realize that every thing that happens in the story has a correspondence to "the real world": in the real world of Sacred Heart, they are trying to figure out what is wrong with a patient, who is rapidly getting worse. In the end, some interns accidentally provide the answer, and they diagnose the patient with Wilson's disease. However, the disease is so far progressed she now needs a new liver.
In the story, the handmaiden recovers, and the Dr. Cox is asked by his wife if that's what "really happened." Did the patient actually survive? Dr. Cox says, "That's how I'm telling it."
It's kind of an interesting example of layering a fairy tale narrative onto a "real" narrative. That's certainly an option for your work: the fairy tale tale could be narrated by a character in the story, who is using it to deal with a real life incident.