Here is how I made the cheeseclothe ghost.
Supplies
3 yds. Cheeseclothe
1 bottle Stiffy (fabric stiffener)
black felt
plastic spiders (optional)
glitter (optional)
small balloons
popsicle sticks
masking tape
box (to put it on while it dries)
can of food
plastic wrap

Step 1: Cover box with plastic wrap, secure with masking tape.
Step 2: Make ghost form out of balloon, masking tape, and can. At this point you can add arms by blowing up 2 waterballoon size balloons and puting them on sticks portruding frontwards.
Step 3: Put 3 yards of cheeseclothe (cut into single yard lengths) into large ziplock bag, pour in about half a bottle of Stiffy. Squish bag until clothe is throughly coated. Pull out clothe one length at a time, gently sqeeze (DO NOT Ring-out.) Drape over form. I like to have it more gathered in the front and flowing out in the back so my ghost looks like he's moving. I also add glitter at this point.

Step 4: Allow to dry for 2-4 days. Then add eyes, mouth, and spiders.