Royalty is expected to hobnob among the commoners, but Princess Diana certainly didn't see this encounter coming when she woke up on December 1, 1986. At the Labyrinth Royal Premiere, Henson and the friendly monster Ludo ended up chatting with Di and Prince Charles about anti-Fraggle poaching charities or the societal implications of David Bowie's codpiece or whatever was the issue of the day. Diana's bemused expressions is absolutely priceless.
Also courtesy of the Jim Henson Company is the Jim Henson's Red Book website, which collects the pioneering puppeteer's single line journal entries from 1965-1988. You can find a ton of interesting stuff there, like a draft of Sam the Eagle's letter inviting Prince Charles to The Muppet Show and this hilarious news report of Sweetums photobombing the Queen of England in 1977.