1. Open your image.
2. Open the layer palette.
3. Double click on the background layer. It will be renamed to Layer 0
4. Hold down the control key while you click on the new layer icon at the bottom of the layer palette. You will have a new blank layer beneath your Layer 0. I will refer to it as the “fill layer”. You can double click on it and rename it to “Fill”.
5. Increase your canvas size to 130 percent (Image/Canvas Size - 130% in Photoshop)
6. Make sure you have the Fill layer below your image as the active layer and use the fill tool to fill it with white by clicking on the image. You should have a white border around your image.
7. Make Layer 0 your active layer and choose a rough brush that has a "holey" look like a pastel or charcoal brush. You may have to load a new set of brushes. (Click the flyout area near the brush icon to find your controls for choosing new brushes.)
8. Adjust the brush tip so it's not too big. Start to draw around the edge of the image with black (or another color). Make sure your opacity is 100%. Adjust where necessary by erasing or filling in.
9. When you're satisfied with your edge go to the layers palette and click on the fill layer. Click on the eyedropper tool and choose a color from the image to use for your "matte". Change to the fill tool and fill the area with your new color.
10. Go to the Filters menu and choose texture and then texturizer. I used the sandstone texture, but you can use any one that suits your image.
11. .Make layer 0 the active layer.
12. Click on the Magic Wand tool and click on the matte area to select it. Watch your tolerance setting. If it is too high it will select portions of your image! Edit/Copy
13. Invert the selection so it outlines your image plus the black border. (Select/Inverse)
14. Go to Layer/Layer Styles and choose Drop Shadow. Adjust the sliders to create the angle, size, and opacity of shadow you want. (This isn’t available in Elements)
15. Make the Fill layer at the bottom the active layer by clicking on it.
16. Choose your rectangle tool and set the feathering to 25.
17. Draw a selection near the edge of your matte. Invert the selection.
18. Go to your levels adjustment and move the middle slider to the right. The edge of the image will darken.