After doing some more research, I found a FTC publication with information in regards to the material used to make the crayon wallets.
"The following items are not covered by the labeling requirements:...Textiles used in: handbags or luggage, brushes, lampshades, TOYS, feminine hygiene products, adhesive tapes and adhesive sheets, cleaning cloths impregnated with chemicals, or diapers." (I added the capitals)
This makes me think that my crayon wallets are exempt from labeling requirements. (If anyone knows otherwise, let me know, I really would like to be in compliance).
Here's a link to that document:
http://www.ftc.gov/bcp/edu/pubs/business/textile/bus21As for the crayons, you're probably right about including the packaging, but that isn't going to work with the way I currently make and sell my wallets. I usually buy a huge box of crayons and then split them up into groups 8. And, right now anyway, my wallets are made with 8 individual slots for crayons, not one pocket for a box. I'd rather not have to change my design, but if it makes it easier to comply with regulations, it might be worth it.
I sent a question out on the CPSIA site this morning asking about the crayons. I'll let you know what they reply.