The Prop Shop is at the back the the Park near Honey, I Shrunk the Kids Playground, Studio Catering Company, and the AFI shop.
If you walk down Mickey Ave, turn left in front of the Backlot Tour and it's just past the bathrooms and the Splash mermaid fountain on the right.
If you walk down Streets of America (towards Lights! Motors! Action!), turn right as if you are going to enter Honey, I Shrunk the Kids and it will be on the left.
Also, if you go on the Backlot Tour, you'll exit directly into the AFI shop. Once you leave the AFI shop, the Prop Shop is right in front of you.