Recently I hosted a Mad Hatter's Tea Party. The main event was the creation of some super cool and crazy hats. Supplies needed: a paper bag and ....stuff (party streamers, tissue paper, pipe cleaners, markers and feathers, for example). Yep, it doesn't have to be fancy to be fun. Just roll up the opening of the paper bag once or twice and it's the perfect size for a kiddo. Then decorate! Find some things around the house (the wackier, the better) to glue/staple/stick to the bag.
Free form crafts (those that don't have a final creation in mind) are a great way for kids to work on their imagination and planning skills. There are a lot of decisions involved in making something from the simple bits and pieces around you.