We went to the Otawara Summer Fireworks display. This was held during the Obon Festival summer holidays (August 16 in 2007). While we were waiting for the fireworks to start something much more interesting happened.
At the end of the Obon festival there is a tradition to light lanterns and set them afloat on the river. Its done all over Japan and even overseas. In the Otawara ceremony they floated hundreds of lanterns on the river just as it was getting dark. It was beautiful.
Our neighbour called it Syou Rou Nagasi, but the only reference I could find to it on the internet called it Tooroo Nagashi. As near as I can tell its about releasing the spirits of the dead.
I want to make this site practical and I realize this post doesn't help anybody to attend such an event. For this and the fireworks post, I can only suggest as Obon approaches ask a Japanese friend to find out when and where this event is on.