The Kindergarten team at my school just did Tie Dyed shirts and they are so adorable. They asked for each child to bring in a plain white t-shirt. Some parents even sent in the 3 packs of Hanes and they had extras for those that didn't bring them. They bought a $20 tie dye kit and the directions are in there. One of the teachers stamped animals along the bottom of hers.
Another idea is fabric paint. You could have them bring in a shirt and you could water it down a bit and put it in a pan big enough for their foot and you could let them "stamp" their feet on the shirt and write their name. I say feet because it's field day and they'll be running. You could also use stamps of balls and stuff to go around the feet.
Hope this sparks some ideas for you.