Actually, I have a cute caterpillar stuffed toy that I use sometimes in this situation. It works quite well. Depending on how quickly the students respond to me (if at all...it's kinda rare when they don't respond) I will bring the stuffed toy out. I use it as kind of a puppet.
And I do the voices thing too actually. I use interesting voices to get them laughing (by using the power teaching method). I'll use high, low, robot, monster, fast, slow, etc.
One thing I've been doing lately is to include the parents into the demo lesson. This readily breaks down some walls. There's not too much of a problem anymore...just an occasional student but I'm not going to let it bother me
Thanks for your tips.