From the picture, this is what I have to offer. I will list the materials first. Use 1/4" plywood ripped to 11 7/8" to cover the 2 x 4's. Cover the Corners with either 1 x 2 or 1 x 3 boards, preferrably beveled at the corners. If you don't bevel the corners, then use a 1 x 2 for one side and a 1 x 3 ripped to 2 1/4" for the other leg with a butt joint to form the outside corners. For the base board, use 1 x 8 mitered at the corners. For the bottom rail that shows above the baseboard, use 1 x 6 or 1 x 8, depending on how much you hide behind the baseboard. You may want to put a bottom cleat in behind the baseboard for nailing, but it isn't necessary. For the top rail, again use 1 x 6 or 1 x 8. I can't tell if that rail is narrower than the bottom rail. To finish off the inside of each paneled side, you can buy or make a cove molding or some other beaded molding and nail it to the inside edges of your rails and stiles. Once you have fitted all of that together, you are ready for the crown molding. You can either nail just the bottom edge and the corners and let the top float or install a nailing cleat behind the top edge. You will have to figure out the exact size. Usually it is better to make the cleat a little shy to allow for some finessing into place.
Now, where to buy the materials...I think Lowes and Home Depot are in the crapper for moldings. In Minnesota we have Menards, which has lots of moldings to choose from. You will have to see what is available in your area. Oak is most common and is the easiest to stain and make look nice. Maple is the next most common, but does not stain well and you would have to use birch plywood because most lumber stores don't handle maple plywood. If you have access to a millworks or a wholesale lumber supplier, then you have a lot more options.
This will give you a start. Ask away and we will help you from here.
