I don't know about the book, but I definitely remember from the late 80s or early 90s seeing candy canes with this little typewritten explanation of the symbolism.  I am a Christian, and even this is just too icky-poo for me.  What would Jesus do?  I don't think he'd make people look for meaning in a piece of high-fructose corn syrup.

I don't know what I'd do about the librarian situation.  Can you explain to Grant that it is not a true story, just something someone made up about a candy cane?  I would imagine at his age he just liked getting the candy, but it would still annoy me.  I prefer to teach my son about my beliefs at home, thank you, not with someone profiting on some crappy book.