Now that ScribblePress isn't free, this is a great alternative for elementary digital storytelling. Little Story Maker lets students incorporate images from the photo roll as well as record their own audio with their stories - all for FREE.
This app is free until April, though know that some content becomes an in-app purchase. Bookabi allows students to create their own storybooks with 2D and 3D characters. They can upload their own photos and pictures plus save and share their final projects.
This is a free app that is similar to iMovie. For an additional $.99, you can have full capabilities of adding photos, music, voice over, and transitions.