DH and I found churros in MK between Fantasyland and Toontown. We happened to be on our way to Toontown to find the frozen Minute Maid lemonades which I love!
I know you asked about MK, but my husband found some at AK - he was determined to find them somewhere since he remembered having them as a child at WDW! I think he must have mentioned then a half-dozen times that day!