Is this it?
An issue from 1971 featured a parody of Sesame Street, entitled "Reality Street". The parody featured Gorgon (Gordon), Dirty Bird (Big Bird), Curt and Bernie (Bert and Ernie, though at one point, the latter is mistaken with the former), Ookie (Oscar the Grouch), Cake Monster (Cookie Monster), and Scary Monster (Herry Monster). Grover, Susan, Mr. Hooper, Roosevelt Franklin, Betty Lou, and Little Bird, all of whom are unnamed in this parody, also appear. Scenes include Bernie teaching Curt how to tell time, Bernie showing his toy phone to Scary Monster, Gorgon teaching about the number 5 and the letter P, and Ookie moving into a trash heap across the street. This parody can be found in the book, Mad About the Seventies.
http://muppet.wikia.com/wiki/Mad_(magazine)
That was from MAD Issue #146 in October, 1971, illustrated by Jack Davis, who also worked on illustrations for
Sesame Street itself.
He also illustrated another Sesame Street parody in MAD in 1978 called Mafia Street.
I couldn't find any pics from either of those online to verify, though.