Make sure the music teacher is included, as well as the principal and any others whose approval is necessary for an event. It may well be they are "uninformed" but that's a little hard to believe in this day and age. Your being required to attend, and the (intentioned?) withdrawal of students who have different beliefs is probably grounds for a suit, and the school admins should, very sternly, be made aware of that fact.
Contact your local ACLU for the particulars - they're great about giving you info by phone or email. Had this "cultural event" included scripts with Hanukah, Kwanzaa etc. being acknowledged (Muslims also recognize Christ as a prophet), perhaps the event could have been tolerated. However, being religion-based, I may be wrong on this point as well!
Cross-post this to GD, too - lots of us don't often visit specific smaller forums, and there are a number of civil libertarians on DU who probably have a lot more info than I do.
Happy holidays! Hope your Solstice is terrific! (Here in Fairbanks, we have a HUGE Winter Solstice festival - come join us and celebrate one year - a link:
http://www.downtownfairbanks.com/Thanks for unlurking, BTW! :hi: