UPDATE: Post has been updated with scans of the complete text of the story. See bottom of post.
Ah, there's Ms. Welles, the nice old lady who lives down the lane. She's holding up "Patches", a toy monkey onto which she's sewn patches of clothes from all the children in her family that have played with him over the years.
That's Molly and Jason looking on. Jason loves Ms. Welles as if she were his own Grandma, but Molly suspects she might be a witch.
"Patches" lounges on a tree branch (a detail from the cover illustration).
Ms. Welles passes the doll on to Jason. Jealous, Molly frightens Jason with a story that the doll eats all the children that play with him, and this somehow keeps Ms. Welles from dying. Did she just invent this story out of thin air, or did Ms. Welles send her this information with her witchy "vibrations"?
That night the children are home alone, Jason is snuggling "Patches" in bed until the monkey gives him a bite. At least he thinks its a bite. Molly inspects the doll and finds a bent pin on its hand (visible in the illustration below).
She stuffs him in the closet, but there's a lightning storm and the power goes out. Creak....thump....jingle jingle. What's that sound? Where's Jason?
Is that Patches or Jason? Molly fumbles in the dark. At this point, the story gets downright creepy, as "Patches" merges with Jason:
He started toward her, his smile growing wider and thinner until it was a red line of yarn across a flat face. He laughed in a silly falsetto that wasn't Jason's laugh at all. "I'm not fooling," the monkey said.
One of the things that used to disappoint me about many horror stories written for children is the obligatory happy ending. Also, it often seemed the ghost, or monster, or mysterious thing that we've been afraid of all through the story ends up being debunked with a non-supernatural explanation. This always seemed like a cop-out...leading children to the edge of terror, but afraid to make that final jump.
But you'll get no such relief from "The Patchwork Monkey".