The size of clothes would be a determining factor as to what size blocks you could get out of them. There are disappearing 4p & 9p that could work or even some stars. If you have access to EQ6 or 7 check the 9P out and the stars. You could even check out the 9p activity on the main page which has a lot of ideas there. I absolutely wouldn't rule out a crazy though especially if there's any lacework, rickrack, buttons, etc. that are cute or such on the clothing.
Good Luck and please let us know what you decide. I have boxes of clothes that I've saved from my son for a someday grandchild and wondering if I would like to do something like this instead.