Well, I think the reaction should look something like this (you'll need to add it to reaction_smelter.txt):
[REACTION:FB_CHEST_ITEM]
[NAME:retrieve item from magic chest]
[BUILDING:SMELTER:NONE]
[REAGENT:A:1:TOY:ITEM_TOY_FB_CHEST:NONE:NONE]
[PRODUCT:50:1:WEAPON:NO_SUBTYPE:INORGANIC:STEEL]
[PRODUCT:50:1:ARMOR:NO_SUBTYPE:INORGANIC:STEEL]
[PRODUCT:50:1:SHIELD:NO_SUBTYPE:INORGANIC:STEEL]
[PRODUCT:5:1:BOULDER:NONE:INORGANIC:EXPLODE]
[SKILL:COORDINATION]
and then your creature would need this tag:
[ITEMCORPSE:TOY:ITEM_TOY_FB_CHEST:PLANT_MAT:OAK:WOOD]
and then you would need to add this to item_toy.txt:
[ITEM_TOY:ITEM_TOY_FB_CHEST]
[NAME:magic chest:magic chest]
[HARD_MAT]
and finally to inorganic_stone_mineral.txt:
[INORGANIC:EXPLODE]
[USE_MATERIAL_TEMPLATE:STONE_TEMPLATE]
[STATE_NAME_ADJ:ALL_SOLID:explodium][DISPLAY_COLOR:4:7:1][TILE:'.']
[IS_STONE]
[SPEC_HEAT:1]
[MELTING_POINT:0]
[BOILING_POINT:1]
[SOLID_DENSITY:400000]
I think that should all work, but I'm not quite sure on the itemcorpse tag, that might not be quite right. And if you don't want my exploding rock to appear, then don't bother adding it to inorganic_stone_mineral.txt, and remove the [PRODUCT:5:1:BOULDER:NONE:INORGANIC:EXPLODE] line from the reaction.
What should happen is that when you kill the creature, it drops a 'magic chest', which at the smelter you can then turn into items. You have a 50% chance of getting a random weapon, a 50% chance of getting a random piece of armour, and a 50% chance of getting a random shield. And if you include the exploding rock, a 5% chance of getting that!
Lastly, I think I see another problem in your creature. For your wood tissue, you've got the material as: [TISSUE_MATERIAL:INORGANIC:WOOD], when it should look like this: [TISSUE_MATERIAL:PLANT:OAK:WOOD]. Having said that, I'm not quite sure on what the correct syntax should be exactly, but it should look something like that.