Walk around to the neighbors and ask for their big appliance boxes. Cut a few holes for a door, a window, etc. Get some markers and decorate the "fort" (castle, house, train, boat, etc) together.
We all know the kids like the box better than what's inside, so why not skip the inside part completely?
If you get two of slightly different sizes, you can make a pretty realistic looking (and fairly durable) train.
I know this is too late now, maybe helpful next year, though.
-W