"Project: Making Toddler Crayons" found at 
Martha Stewart via Say YES! to Hoboken.
We used to always make crayons when we were kids. I had some craft kit with different shapes. This is certainly a project to remember. You can even used cookie cutters and wax paper, I think, to make different shapes.
"Tools and Materials
- Kitchen knife
 - Old crayons
 - Mini-cake tins (we used pans with heart- and circle-shaped pockets)
 
Crayon How-To
- Parents can use the knife to chop crayons into pea-size pieces, taking care to keep colors separate so kids can combine them as they like.
 - Preheat the oven to 150 degrees while children fill the tin with crayon pieces, arranging them in interesting designs.
 - Bake just until the waxes have melted, 15 to 20 minutes.
 - Remove the shapes after they have cooled. If they stick, place tray in the freezer for an hour, and the crayons will pop out."