This is an enjoyable topic, that I have researched multiple times.
First off, there is such a gate in Roman military architecture. It is not the door inside a door which is sometimes depicted. But the Fransicans, today, actually have a tourist attraction in the remaining foundation walls of the attempted rebuild of Jerusalem’s walls. The eye of the needle was not meant for camels, it was meant for little boys who could carry messages quickly – angels, if you will, who’s faces were bright red from carrying news from one city to another by running long distances on foot. These messengers were dispached under Roman authority and as Jerusalem was occupied by the romans – this little wonder was added to the wall by them. The present version exists at the foundation, and not only a camel – but you and I can easily get into Jerusalem through this gate today!
(Note: the present gate is bult on top of the original one, but as the architecture of the rebuild was started not too long after Jerusalem was razed to the ground – and since Roman military architecture did not change in that period, the gate is the same structure and shape as the original although the wall is not high enough to stop anyone from entering… )
However, at the time Jesus made the statement – only a little boy could get through. The reason it was so small, was so that it was easily guarded and blocked – and large invaders could not use it to attack the city while still permitting communications between Roman garrisons. There has been countless speculations on it being for traders, camels, and various other things … but historically these are very unlikely given the existance of the Roman version in the walls of Jerusalem even today.
The point Jesus was making, was that it is impossible for a camel to get through the “eye” of a needle – just as it would be impossible for a rope to go through the eye of a sewing needle. If one doesn’t enter the normal way – the alternative may in fact be impossible for full grown men (but not children) – (Of course, now that God has razed the walls of Jerusalem by use of the Pagans, the impossible is slightly more possible…

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In Greek the word for Camel, and one rarer word for Rope differ by only 1 letter, and many early commentators thought Jesus was making a pun. eg: that Jesus did mean a rope through a needle of some kind…
So, in addition to the stories you have heard – there are undoubtedly more you could find, if you enjoy looking for that sort of trivia…
I hope this helps with the imagination…and check out the tour guides to Jerusalem if you can… they probably still run the tour, unless something drastic has happened in the last five years that I am not aware of.