One possibility is through "The Teaching Company" - music programs:

http://www.thegreatcourses.com/tgc/courses/courses.aspx?s=802&ps=904

another is to use videos from the "Sacred Music Series" of the BBC:

http://www.youtube.com/watch?v=uq-UEcOrTfI

Some recordings are available through
http://www.classiccat.net/

I never fail to rely on Oliver Strunk's anthologies of documents, which are very helpful. Peppering your lectures with such technical and anecdotal knowledge right from the mouths and pens of historical persons will really bring them to life. A similar source under the editorship of Richard Taruskin and Piero Weiss is Music in the Western World: A History in Documents.
And, of course, one of the, if not THE, finest of contemporary virtuosic accounts is Christopher Page's book on the first thousand years of Christian music in the west, of which you are, no doubt, aware. Too, I don't think that you should write off Grout-Palisca in recent editions for foundation and overall shape to your course: I know of no finer general history.

If you wish to illustrate your chant lectures with historical examples, you should have on hand Dom Jacques Hourlier's La Notation Musicale des Chants Liturgiques Latins, which may be had from Solesmes (GIA). I have found this a very useful source. Pairing examples from this with chant in modern square notation and having the class sing them is always enlightening to all. (And: don't ever, ever, use an example of chant in anything other than square or Carolingian notation - this is a given, which learnt from the beginning with the aid of solfege becomes second nature to the students.) (Also: when teaching chant, always sing it yourself and never use an instrument for so much as to give a pitch!)

There is so much one could recommend. I'll stop here for now.

I use Schaefer's book and then add my own listening examples on top of his, and fill out some areas that he leaves a bit thin, such as the English and German schools. I add a few more composers into the discussion or expand on the ones he mentions. For example, in our discussion of the English School I include Tye and Tallis, as well as a discussion about the history of the Reformation in general. I also include listening examples of secular keyboard music of Byrd and Tallis as a basis of comparison of secular versus sacred music styles. Schaefer makes no mention of the Germans, so I discuss Hassler (right after the Venetian School, as he studied there), and talk about how Augsburg remained a stronghold of Catholicism in the midst of Lutheran Reform. He only mentions Vittoria for the Spanish School, so I include Guerrero. I also incorporate as much secular music of each time period as I can, so as to demonstrate the differences, similarities and influences on sacred music.

In this way, the men will be able to understand more fully what the Church means in the documents when discussing sacred music as "true art". I highly doubt that after hearing true Western secular art music that they would confuse it with H, H & J.

A friend of mine taught music appreciation at a local university, and while he used an appropriate textbook, he used online resources for all of the listening (IMSLP, Werner-Icking, CPDL, YouTube). It saved the students a ton. For my own music history classes in college, I got hand-me-down cd sets, but I know they were very expensive.

"Grout and the Norton Recordings, which are great but cost a small fortune"
Well, that depends. Current copies, yeah. But old editions are practically free. And the canon of Western art music (particularly the part you're interested in) doesn't change every 5 years. If you're willing to deal with a little lack of uniformity, you could prescribe "Grout (3rd to 6th edition)" or somesuch. That said, free stuff is better, and uniform. A project for several enterprising folk (not me because I'm busy with another big project right now) would be to write an open-source textbook for a 1-semester history of music from a Catholic POV. Or a 3-semester history (the usual sequence) with a 1 semester abridged version.

If MJM doesn't get the job at NPM, he'll probably have time to do it.