You can definitely cover the iFrame with a div.
The thing is you can't use z-index unless you use position:relative, or position:absolute, or position: fixed on the calandar div.
What you want to do is change the "position" CSS property of the calandar to be "relative". If your iFrame has the normal static positioning (meaning you didn't add any special positioning to it, this will work).
If your iFrame has "absolute" positioning, you might need to do "position:absolute" on the calandar.
See link: http://resopollution.com/test/test.html
(works in all modern browsers including IE6)