I began by showing them a map of the United States (I have a large one mounted on the back of my piano). I established the concept of North, South, East, West. Here is the chorus -- let me know if this works for you. You'll probably figure out your own with your kids.
This land is your (pointing two hands at them) land, this land is my (two thumbs to my chest)land
From California (two hands pointing to their left), to the New York Island (two hands pointing to their right)
From the redwood forest (two hands pointing over their left shoulder), to the gulf stream waters (two hands pointing in front of their right)
This (two hands pointing straight down)land was made for you (at them)and me (at me)
Sorry if this is confusing -- I'll try to make it clearer if you need me to!