Challenge: Cosmic horror/fairy tales
The obvious idea: The Brothers Grimm.
Let's roll with that..
It seems that most stories featuring Brothers Grimm involve them being firsthand witnesses to their stories or at least contemporaries. If we remember that they collected the stories that they are associated with then something else, something hopefully a little more fresh, develops as a possibility. Rather than being investigators of the mythical and the unknown they are, so to speak, archaeologists. The stories happened long ago but that doesn't mean that everything about them has turned to dust. The cottage is crumbling and the children died of old age long ago but no creature of that witch's measure simply dies: a shadow of something still remains. The Brothers Grimm hunt down stories (which sometimes don't involve the supernatural, in fact), do what they can to put the matter to rest, and then commit it to writing. Their own predecessors didn't always put the problem down for good, after all, so they aren't foolish enough to assume that it was done right this time.
Following are treatments of a few of their stories.
Hansel and Gretel: As we already discussed the witch, why not start by elaborating on her? The first thing to do is forget everything that we know about witches. The Brothers Grimm will tell us what witches are really about. And what we learn is that witches are far from human.
Indeed, they are the first form of life to walk the world, if "life" can even be used in reference to them. Before the simplest organic compounds assembled, there were witches. They were the first echo of thought and life, an echo that predated the sound that made it, an echo "as old as the hills." They had a society in that time, lonely and brutal but sophisticated and advanced in its own way, but it fell apart before the first vertebrates arose. Fell apart into predatory butchery, fed by a hunger that the presence of other creatures that awoken within them. They had never known their hunger but after it was discovered they were controlled by it and they turned upon each other. It was not centuries but millions of years before they dragged any semblance of complex thought out of their single-minded voraciousness, and the few that survived did not escape injury altogether. The witch that the Brothers Grimm encountered had been reduced to crutches before the time of its death.
Witches were responsible for civilization to a large degree, directly influencing its earliest forms and making possible later developments. They gathered in their favored prey species to better manage them and keep the herds safe from other witches. They gave administrative tasks to some of their sapient prey to allow them to watch over larger herds, and taught them writing to assist in their management. Our population grew almost too fast for them to keep us reigned in but they managed, if barely. The balance of power shifted when one of the witches taught her most prized underlings to eat the bodies of her rivals. Each of them had only the barest scrap of magical power in comparison to the witches but this was enough for give the advantage to her forces in any conflict. Her people swallowed up clan after witch-owned clan but her appetites grew faster than her territory and all at once her own people could take no more. With magic and fire they killed her and then they continued her war. Witches are used to geological spans of time, and everything changed too quickly for them to react to it effectively. Enough time has passed for the history of our origins and the secret of magic to pass away from us, and still they have not had enough time to comprehend all that has happened.
The magic of a witch (and those whose magic is descended from witch-eating) is transmutation. She may not be able to read or ensorcell minds, kill from afar, control animals, or raise the dead, but the entire battlefield is a weapon in her hands and dross can be made gold with a snap of her fingers. She can transform both living and inorganic substances and even herself. No matter what her physical shape, though, humans always perceive a witch as something like a crone with eyes colored entirely red. Perhaps hinted at in their seeming lack of pupils, witches always suffer from poor eyesight (some quirk in their psychology makes any kind of visual thinking or understanding difficult) but balancing this is a superb sense of smell (better than any scent hound's) and the ability to detect any life in their immediate vicinity and determine its nature, whether it be e. coli or elephant. They are also able to distinguish whether it is "naturally" alive or was given life through magic (such as by being transformed from a rock) and if it is currently affected by magic, for which reason witches do not themselves eat the food that they transmute. Though witches are supernaturally strong and can heal from most any wound given time, the damage that is dealt by fire will never heal completely.
Fire, of course, is what supposedly killed the witch of Hansel and Gretel fame. But witches are made of tougher stuff than mortal flesh and no-one was present to keep the fire alive till the bitter end. Something of her will still remained in the ash, charred bone, and crackling black flesh imprisoned within that iron oven. Her power, or rather her ability to extend it past the oven's iron walls, wavered at times, but she nevertheless eventually made contact with a wanderer that had chanced upon the ruins of her cottage. She fed him in exchange for her freedom, and exerted her powers on his behalf in exchange for his blood, shed by her bones and spilled over her ashes. He gathered a small cult around her, and it is this group which attracted the attention of the Brothers Grimm (and, incidentally, their eventual decision to highlight the plight of Hansel and Gretel as a struggle between Christianity and paganism).
After disposing of the cult that had formed around the witch the Brothers Grimm built a new fire to finish the job. It was a long process and required a later grinding of the remains to reduce some of the bone fragments to powder, but in the end all that was left was ash. This they placed in an iron casket and granted, for the purpose of safekeeping, to Frederick William IV of Prussia. Frederick William placed them in the care of the University of Berlin, which transferred them to his crypt in the Church of Peace upon his death. After a failed attempt to steal them by persons unknown (ostensibly to consume the ashes) they were later relocated to the Achilleion in Corfu. They would finally end up buried beneath the Temple of Artemis some time between its excavation and the death of Wilhelm II.